The risk sentiment remains off as Chinese officials continue to struggle to satisfy the market. As we know, the Bank of Japan injected 300 billion Chinese yuan liquidity and also announcing corporate tax cuts as well as an increase in fiscal spending to stable market risk-sentiment. However, they have been less successful so far. Today eyes will be on the technical side of the market as the U.S. Bank remains closed in the observance of President Day.
XAU/USD – Bullish Channel In Play
The safe-haven-metal prices dropped slightly, mainly due to China imposed tightened restrictions to stop the spread of coronavirus. The gold slipped by 0.1% to $1,584.85 as the dollar remains mixed ahead of the U.S. session.
Sixty-million people in the Hubei region have been ordered by the Govt to stay at home until there is an emergency; meanwhile, the use of private cars has been banned generally, according to the South China Morning Post. The single person from each house is allowed to go outside after every three days to buy food and essential items.
Apart from negativity, China has announced a decline in unique cases for a third continuous day. There were 1,933 new claims and 100 new deaths on Sunday, according to figures published by the Chinese government.
Whereas, the Asian stocks rallied today, while the Chinese investments are gaining more than 2%. Japan's Nikkei 225 underperformed its provincial rivals, however, after the country announced weaker-than-expected GDP data.
It should be noted that Chinese officials are continuing to struggle to satisfy the market. As we know, the Bank of Japan injected 300 billion Chinese yuan liquidity and also announcing corporate tax cuts as well as an increase in fiscal spending to stable market risk-sentiment. However, they have been less successful so far.
XAU/USD – Daily Technical Levels
Support Resistance
1562.34 1576.29
1554.3 1582.19
1540.35 1596.14
Pivot Point 1568.25
XAU/USD – Daily Trade Sentiment
The yellow metal gold disrupted the double top resistance mark of 1,577, and violation of this level has extended the buying trend until 1,582 level. At the moment, the pair is holding over 1,582 level, which is expected to encourage further buying in the yellow metal gold. On the upper side, the XAU/USD has the potential to go behind 1,588 later in the day.
USD/CAD – EMA Crossover Leading the Pair
The USD/CAD lost momentum going into the initial segment of last week. You could see the pair getting weak as it confirmed its inability on several days to operate near the highs of the session. It was also an unsurprising turn given the strong trading positions we see in Forex, with volatility hanging around record lows.
As long as USD/CAD lingers underneath 1.3282, we may see a continuation of a selling. It will take a crack under 1.2951 to get things rolling on the downside, which leads us to more of the same that we perceived all of last year – rangebound price action.
It is worth to mention that market equities are flashing green despite the rise in the number of coronavirus cases in China and across the globe. As per the latest news, a total of 105 people were killed by the coronavirus in China on Sunday.
Moreover, a total of 2,048 cases were confirmed in mainland China on Sunday. The global score is also rising, with more than 71,319 cases of the virus recorded worldwide.
USD/CAD- Daily Technical Levels
Support Resistance
1.3283 1.3325
1.3259 1.3344
1.3217 1.3387
Pivot Point 1.3302
USD/CAD- Daily Trade Sentiment
On Monday, the USD/CAD is trading in a selling mode in the course of 50 EMA bearish crossover. The USD/CAD pair is holding nearby 1.3235, moving under an immediate support line of 1.3260 due to weakness in the U.S. dollar. Presently, 1.3260 is likely to extend further resistance to the USD/CAD currency pair.
The RSI and Stochastics are also staying below 50, suggesting chances of selling in the USD/CAD currency pair. Let's look for selling trades below 1.3220 and buying above this same, as the lack of volatility in the U.S. session may not drive major moves in the market.
AUD/USD – Horizontal Support In Play
The AUD/USD currency pair is flashing green and representing more than 10% gains on the day, mainly due to the risk-on market sentiment despite the coronavirus fears. The AUD/USD is currently trading at 0.6725 and consolidates in the range between the 0.6714 - 0.6734. The AUD currency is gaining strength in the wake of risk-on market sentiment.
The futures on the S&P 500 are currently adding over 0.20%, and the major Asian indices except Japan's Nikkei are flashing green. For instance, South Korea's Kospi and China's Shanghai Composite are up 0.23% and 1%, respectively. A total of 2,048 cases were confirmed in mainland China on Sunday. The global score is also rising, with more than 71,319 cases of the virus recorded worldwide, which is adding bearish pressure on Aussie.
The AUD/USD currency pair cross the resistance at 0.6750 during the day ahead if the risk-sentiment remains strong. It should be noted that the hedge funds have recently turned green on the AUD due to hopes that the resilient domestic economy will allow the Reserve Bank of Australia to keep rates unchanged in the near term.
AUD/USD – Technical Levels
Support Resistance
0.667 0.6705
0.6653 0.6724
0.6618 0.676
Pivot Point 0.6689
AUD/USD – Daily Trade Sentiment
The AUD/USD extends trading slightly bullish above 0.6715, which is given by the horizontal support level on the 4-hour timeframe. The buying trend continuation is anticipated to lead the AUD/USD exchange towards 0.6770. Taking a glimpse at the RSI and Stochastics, the Aussie dollar going into the buying zone, passing over the 50 EMA line, which signifies that the bullish trend. Let's take buying trades above 0.6715 today.
All the best for the New York session!
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