U.S. Brief, November 18 - Top Trade Setups in Forex - RBA Assist Gov Kent Speaks

The euro experienced a small break on Monday, surging to an 11-day high against the U.S. dollar, on forecasts that Washington and Beijing can soon come to an agreement to settle a trade war that has been a drag on global economic growth. Shares in Health Care Equipment & Services (+2.87%), Pharmaceuticals, Biotechnology & Life Sciences (+1.65%) and Technology Hardware & Equipment (+1.07%) sectors gained the most.

Applied Materials jumped 9.0%, Danaher rose 5.0%, Under Armour added 3.9%, and Baker Hughes was up 3.7%. On the other hand, Alliance Data Systems dropped 3.0%, and CenterPoint Energy was down 4.5%.

Lawrence Kudlow, White House economic adviser, pointed out that negotiations over the first phase of a trade deal with China were coming down to the final stages. Investors were also cheered by an official report that U.S. retail sales grew 0.3% on month in October (+0.2% expected, -0.3% in September).

Meanwhile, U.S. industrial production fell 0.8% in October (-0.4% expected, -0.3% in September), the worst reading since May 2018. The Empire manufacturing index posted 2.9 for November (6.0 expected, 4.0 in October).

XAU/USD - US-China Trade Talk Eases Haven Appeal

On Monday, the yellow metal gold slid as rising confidence for a U.S.-China trade agreement following the description of "constructive talks" over the weekend raised sentiment for riskier assets.

The market witnesses a trade agreement between the U.S. and China as more likely after U.S. economic adviser Larry Kudlow and Commerce Secretary Wilbur Ross were working towards achieving the "Phase 1 deal," which as per them seems near.

The Sino-US trade front, the United States, and China trade talks remain under the focus, with different comments delivered by both nations during the last week. Notably, the United States official still on the optimistic track for the likely trade deal, whereas changing the Chinese official's demand has put some doubt on the trade talks because we near the December 15 U.S. tariffs hike on China's imports.

At the Hong Kong front, the situation remains very fluid and unstable due to the protestors still challenging and set Hong Kong's Polytechnic University entrance ablaze because police caught a lot of them in the University.

XAU/USD - Daily Technical Levels

Support Resistance 

1458.56 1467.83

1453.59 1472.13

1444.32 1481.4

Pivot Point 1462.86

Gold - XAU/USD- Daily Trade Sentiment

The precious metal gold hasn't changed much as it proceeds to trade under 1,472, the main resistance region. At the moment, 50 period EMA is extending solid resistance at 1,468 level, and the formation of the inside down bar is proposing chances of an additional decline in gold prices today. 

Gold may get support near 1,461, and 1,457. Right now, gold is trading near 1,466 level, and it appears to produce three black crows pattern on the 4-hour graph. If this occurs, the odds of a bearish reversal will be stronger. On the downside, gold can get the subsequent support at 1,464 and 1,460 level while the resistance lingers at 1,469 and 1,472.

GBP/USD - Ascending Triangle Pattern

On Monday, the GBP/USD raised in early trading to consolidate around 1.29500, above a bullish trendline that stretches back to a high posted in October. The bullish price action sets a positive trend with a likely first mark of 1.3000.

At this moment, the GBP/USD is trading at the 1.2950 level, consolidating daily gains supported by a lower U.S. dollar. The greenback sank beyond the board through the European and Asian session due to weaker U.S. yields. The ten-year fell to near 1.80%, moving away from the weekly highs it arrived a few days ago. 

At the U.K. front, British retail sales figures published today had not left any impression on the market, the identical position fitted with US PPI. During today, the United States retail sales statement is registered to deliver. Market traders will also thoroughly examine the headlines concerning the United States and China trade discussions.

Confidence that the U.S. will decrease tariffs on China's products fluctuated insignificantly as talks continue to face new obstacles, although some concrete measures were obtained after both countries elevated the ban on chicken imports. On the opposite side, the European automobile division still anticipating Trump's decision on auto tariff while growing expectations that the U.S. President would keep the decision by further 180 days.

GBP/USD- Daily Technical Levels

Support Resistance 

1.2841 1.2905

1.2801 1.2929

1.2738 1.2992

Pivot Point 1.2865

GBP/USD - Daily Trade Sentiment

The GBP/USD is keeping an upward trend following the bullish breakout of a wide trading range of 1.2870 - 1.2835. It's holding around 1.2920 mark, which actually is a resistance level, spread by former bearish trend line on the 4-hour graph. Extension of a bullish bias can drive to GBP/USD towards 1.2935, and 1.2970 level. Whereas, on the lower side, 1.2890 remains immediate support.

AUD/USD – Market Set for Bearish Retracement 

The AUD/USD currency pair flashing red and taking round near the 0.6815 on the day. As of writing, the pair fluctuating between the range of 0.6806 - 0.6821 and representing -0.11% losses during the day so far, due to intensifying tension in Hong Kong and lack of any fresh data/events. 

The AUD/USD currency pair failed to get support from the United States, and China trades positive headlines just due to the Hong Kong protest. 

Whereas the United States (U.S.) President Donald Trump told China's big agriculture buying to represent the optimism surrounding "phase one" talks, media reports from the dragon nation also tell Friday's phone call between the two sides as helpful. However, the market still didn't receive any fresh hint regarding when the initial trade deal will be signed.

At the Hong Kong front, the situation remains very fluid and unstable due to the protestors still challenging and set Hong Kong's Polytechnic University entrance ablaze because police caught a lot of them in the University. The United States (U.S.) supports the protesters' right to challenge the one country, two systems, but China doesn't want it, and the similarly keeps the market's risk sentiment negatively affected.

That said, S&P 500 Futures unchanged around 3,119, whereas the trader still on the waiting mood despite the positive headlines regarding the United States and China trade deal. 

The lack of data and events keeps sending the traders to the United States and China headlines, not going to forget Hong Kong, for fresh direction. On the other hand, the traders will keep their eyes on the meeting from the Federal Reserve Bank of Australia.

 

AUD/USD - Technical Levels 

Support Resistance 

0.6794 0.6836

0.6766 0.685

0.6724 0.6892

Pivot Point 0.6808

AUD/USD - Daily Trade Sentiment

The AUD/USD displayed sideways movement around 0.6810 level after testing the support level of 0.6800. The pair is now forming Doji candles around 0.6810 as the violation of this level can trigger bearish sell-off until 0.6770. 

The MACD and RSI consolidating in the bullish zone, but the 50 periods EMA may keep the AUD/USD bearish below 0.6840 level. Today, the AUD/USD may trade bearish below 0.6830 level, so better looking for a sell entry to target 0.6775. 

All the best for the New York session!