US Brief: top Trade Setups in Forex - Dollar Gains Ahead of US GDP Figures


The markets are mostly trading with a stronger dollar sentiment ahead of US GDP data. The US Federal Reserve will release its latest economic report, the Beige Book. The Commerce Department will issue second readings of 3Q GDP (+1.9% annualized on quarter expected), October durable goods orders (-0.9% on month expected), personal income (+0.3% on month expected) and personal spending (+0.3% on month projected).

Also, the Labor Department will report initial jobless claims in the week ended November 23 (221,000 expected). The Market News International will post November Chicago PMI (47.0 expected). The National Association of Realtors will publish pending home sales in October (+0.2% on month expected).

 

XAU/USD - Safe Haven Appeal Diminishes 

The gold prices flashing red and dropped by 0.1% to 1,456.05, mainly due to the positive Sino-US trade talk news. Gold futures slipped 0.1% to $1,463.05 to trade during the European open. The fall came because global risk-on sentiment improved in the wake of reports that the top trade negotiators from the US and China held a telephone conversation on Monday. They had "reached a consensus on properly resolving the latest issues.," according to press in China.

On the other hand, the United States President Donald Trump is hopeful for the phase-one deal with China even after the media releases from Beijing that blamed the US for unfair behavior. The greenback stays on the bullish track across the board as investors still trust the US dollar during the risk-on sentiment.

Elsewhere, the recent trade headlines from the United States President Donald Trump that "we are very close to making a deal with China, and it had got to be good," is also weighing on the yellow metal gold prices.

XAUUSD

 

XAU/USD - Daily Technical Levels

Support

Pivot Point

Resistance

1453.27

1458.15

1466.21

1445.21

1471.08

1432.28

1484.02

 

Gold - XAU/USD- Daily Trade Sentiment

Traders, the precious metal is trading at 1,456 with a bearish bias, especially after forming three black crosses below 50 periods EMA resistance area of 1,464. 

Taking a look at the 240 minutes chart, gold is heading south as over faded safe-haven appeal, and it's very likely to test 1,453 region today. Let's look for sell trades below 1,460 areas to target 1,456 today.

 

USD/CAD - Bearish Breakout on EMA 

The USD/CAD closed at 1.32711 after placing a high of 1.33161 and a low of 1.32690. Overall the movement for pair remained Bearish that day.

The rising Crude Oil prices on Tuesday gave strength to Commodity-linked Loonie and weighed on USD/CAD prices. At 18:30 GMT, the Corporate Profits of Canada showed a drop in this quarter to 0.4% from the previous 5.2%. 

The Organisation of Petroleum Exporting Countries (OPEC) is supporting an extension in the Crude Oil Output reduction agreement ahead of Next week's meeting. This news has raised the prices of WTI Crude Oil, and as a result, the Commodity-linked currency Canadian Dollar has gathered strength against its rivals on the back of rising Crude oil prices.

According to Russian news agency TASS, members of OPEC are discussing whether the extension will be for three months or six months. The barrel of WTI rose about 0.55% on that day. The positive relation of WTI and CAD put pressure on USD/CAD on Tuesday.

On the other hand, the US Dollar was seen under pressure after the release of CB Consumer Confidence and the Richmond Manufacturing Index. 

The consumer confidence of the United States dropped to 125.5 from the expectations of 126.9, and the Richmond Manufacturing index also fell to -1 from 6. This weakened US Dollar against Canadian Dollar and hence added in the downward movement of USD/CAD pair on Tuesday.

 USDCAD

 

USD/CAD - Daily Technical Levels

Support

Pivot Point

Resistance

1.3254

1.3285

1.3302

1.3237

1.3333

1.3189

1.3381

 

USD/CAD - Daily Trade Sentiment

The USD/CAD is trading with a strong bearish bias. As we can see on the 4-hour chart, the pair has violated the support level of 1.3265, and it's also crossing below 50 periods EMA. 

Closing of candles below this level can extend selling until 1.3240. Looking at the MACD and RSI, the values are below 0 and 50, supporting the bearish sentiment. Consider taking sell position below 1.3285 level today. 

 

AUD/USD – Descending Triangle Set to Breakout

The AUD/USD pair closed at 0.67870 after placing a high of 0.67951 and a low of 0.67677. Overall the trend for the pair remained Bullish that day. Aussie pair rose to 0.6790 level on Tuesday amid the decline of the greenback against the counter currency.

On Tuesday, The Governor of Reserve Bank of Australia Philip Lowe gave a speech in Sydney. He said that RBA might create money to buy government bonds in case of running out of levers to boost the economy. 

Lowe told that quantitative easing could help further if more interest rate cuts and fiscal stimulus failed to boost the economy. He also mentioned that this was not the agenda at this point in time.

He further said that Australia was unlikely to hit a situation where negative or below zero interest rates could damage confidence and economic activity. He added that it was more likely that rates would stay low for an extended period.

Philip Lowe did not rule out the possibility of further rate cuts but said that the economy was already benefiting from a low level of interest rates. He noted that RBA has failed to meet the inflation target of 2-3% for 20 successive quarters and suggested that it may be forced to buy up to $200B of Government bonds to flood the financial system with money.

He further argued that the international experience suggested that when there were problems in the supply side of the economy, fiscal & structural policies were a better approach than monetary policy because it cannot drive longer-term growth.

Aussie gained traction against the US Dollar after the speech of RBA Governor Philip Lowe and gave strength to AUD/USD pair.

Adding in the bullish trend of pair was the weaker than expected Consumer Confidence from the United States and the raised trade optimism after the latest trade talks between US & China.

AUDUSD

 

AUD/USD - Technical Levels 

Support

Pivot Point

Resistance

0.677

0.6783

0.6797

0.6756

0.681

0.6729

0.6837

 

AUD/USD - Daily Trade Sentiment

The AUD/USD consolidates in a narrow trading range of 0.6800 - 0.6765. The range is extended by descending triangle pattern on a 4-hour chart. The 50 periods EMA is also expected to keep AUD/USD is selling below 0.6790. 

Fellas, the descending triangle patterns usually break on the lower side, and if that happens, we may see AUD/USD going towards 0.6740. Whereas, bullish breakout and crossover above 50 EMA can lead AUD/USD towards 0.6830. 

 


 

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