Top Trade Setups in Forex - US Factory Orders in Highlights!

The market is trading sideways as investors await U.S. NFP figures tomorrow, and they seem to avoid taking trades. Regarding the U.S. economic data, the Automatic Data Processing Inc (ADP) jobs report showed that the economy added 67,000 private jobs in November (+135,000 expected, +121,000 in October). 

The Markit U.S. Services Purchasing Mangers' Index (final reading) posted 51.6 for November (in-line with preliminary reading). The Institute for Supply Management's (ISM) Non-Manufacturing PMI fell to 53.9 in November (54.5 expected) from 54.7 in October.

n the U.S., the Labor Department is expected to report Initial Jobless Claims at 215,000 for the week ended November 30 (213,000 the week before).

A trade deficit of $48.6 billion in October is expected (gap of $52.5 billion in September). Factory orders in October are expected to increase by 0.3% on the month (-0.6% in September), and durable goods orders (final reading) are expected to grow 0.6% on the month.

 

XAU/USD - Sideways Trading, Eyes on NFP Tomorrow 

 The safe-haven-metal prices dropped and return from the four-week high after the reports that a trade deal between the U.S. and China was in the making. The news comes despite a series of earlier and less hopeful headlines arising from U.S. President Donald Trump's 'chess-play' in signing the Hong Kong Human Rights and Democracy Act, legislation supporting protesters in the territory. 

Gold moved from a near 4-week high at $1,484.09 to a low of $1,471.52 where it met the 50-hour moving average, which remains just above the 21-day moving average down at $1,468 which makes for a potentially strong level of support.

Gold remains a favorite hedge to the trade war uncertainties for its safe-haven properties and market liquidity.

Meanwhile, the U.S. dollar, which is directly correlated to the gold price, has picked up a touch from the U.S. session lows after yet another hit to the head in European markets. That fact took the DXY index to its lowest levels since November 04 down at 97.43, a far cry from October and YTD peak of 99.67. Crucially bearish for the U.S. dollar, the bears have pierced the 200-day moving average.

After a turn in sentiment in the U.S. economy due to some recent disappointing economic data of the manufacturing sector,  Federal Reserve Chairman Jerome Powell's message that 'the glass is half full,' has put the Fed under scrutiny again. Therefore, the expectation of narrowing interest rate differentials is weighing on the U.S. dollar a positive for gold.

 

XAU/USD - Daily Technical Levels

Support	Pivot Point	Resistance
1464.34	1473.12	1486.32
1451.14		1495.1
1429.16		1517.08

 

Gold - XAU/USD- Daily Trade Sentiment

Gold has traded sideways on Thursday, as investors seem to stay out of the market ahead of a big day. Gold placed a high around 1,477 today, after falling from 1,484 yesterday. On the 4 hour timeframe, the upward trendline is putting weight on precious metal gold technically. 

Gold has formed Doji candles above 50 periods EMA which are suggesting chances of a bullish trend. For now, gold is likely to trade bullish 1,472 and bearish below 1,484 until we see a violation of this range.

 

USD/CAD - Dramatic Dip, Bullish Retracement Eyed

The USD/CAD closed at 1.31989 after placing a high of 1.32978 and low of 1.31918. Overall the movement of pair remained strongly Bearish that day. The Canadian Dollar posted substantial gains after the Bank of Canada held rates and sent a positive message to the markets. Stronger Loonie gave sharp fell to USD/CAD prices and dragged the pair near its 2-weeks low point.

At 20:00 GMT, Bank of Canada maintained its benchmark rate at 1.75% in its monetary policy meeting on Wednesday. The rate statement was positive and helped Canadian Dollar to rise against its counter currency U.S. Dollar. 

The Bank of Canada has stood on its overnight rate at 1.75% since October 2018 despite a wave of rate cuts at other central banks around the world. According to the Central Bank of Canada, the inflation rate of Canada was near the bank's 2% target, and there was no need for a rate cut this year. 

The rate cuts by other banks, especially the Federal Reserve of the United States, have provided significant support to the global economy and have eased he fears of global economic downturn. The Bank of Canada said that there was nascent evidence that the global economy was stabilizing, and recession concerns were also eased. However, the ongoing trade conflicts still weigh on global economic activity and remained the most significant source of risk.

According to economists, the tone of BoC was more optimistic than it was in previous rate announcement when it indicated cautions related to ongoing trade war and acknowledged that it had considered rate cut as insurance against worsened conditions.

In the context of the future interest rate decision, BoC said that it would assess trade conflicts and its effects on the Canadian economy – notably consumer spending and housing activity to make further decisions.

Keeping rates on hold gave strength to the Canadian Dollar and moved USD/CAD on Wednesday in the downward trend. The weakened U.S. Dollar after the release of ISM non-Manufacturing PMI & ADP Non-Farm Employment change gave a boost to the dropping trend of pair and helped in falling near 2-weeks low point.

 

USD/CAD - Daily Technical Levels

Support	Pivot Point	Resistance
1.3163	1.323	1.3268
1.3125		1.3336
1.3019		1.3442

 

USD/CAD - Daily Trade Sentiment

The USD/CAD pair has made sharp bearish movements to drop from 1.3260 to 1.3180 trading level. Most of the selling came after the USD/CAD violated the ascending triangle pattern on the lower side. 

The USD/CAD may find next resistance around 1.3200, along with support around 1.3160. Looking at the MACD and RSI, both of them are massively in an oversold zone, which indicates chances of a bullish retracement in the USD/CAD, but it's most likely to come around 1.3160 support. Consider staying bullish above 1.3160 today.

 

AUD/USD – Aussie to Complete Fibonacci Retracement 

AUD/USD pair closed at 0.68470 after placing a high of 0.68547 and a low of 0.68129. Overall the movement of pair remained slightly Bullish that day. At 5:30 GMT, the Gross Domestic Product (GDP) for the third quarter of the year from reserve Bank of Australia was released, which showed a drop to 0.4% from the expectations of 0.5% and weighed on Aussie.

On the back of weak GDP from Australia, the pair AUD/USD saw some pressure in the beginning session of Wednesday. But later, when data from the American side was released, the pair started to gain some traction amid weakened USD.

At 18:15 GMT, the long-awaited ADP Non-Farm Employment change from the United States was released and came in as 67L against the expectations of 137K and weighed on USD.

At 19:45 GMT, the Final Services PMI from the U.S. came in as expected 51.6. At 20:00 GMT, the ISM Non-Manufacturing PMI of the United States also dropped to 53.9 from the expectations of 54.5 and weighed on USD.

Adding in the upward trend of AUD/USD was the fresh trade optimism from Bloomberg report, which suggested that the U.S. & China were taking the number of tariffs that will be rolled back as part of the phase-one deal.

Raised trade optimism helped the China-proxy Australian Dollar to gain some traction in the market, and hence pair AUD/USD moved in an upward trend to end its day near the level it started the day with.

 

AUD/USD - Technical Levels

Support	Pivot Point	Resistance
0.6824	0.684	0.6866
0.6798		0.6882
0.6756		0.6924

 

AUD/USD - Daily Trade Sentiment

The AUD/USD hasn't moved much lately in the wake of a lack of volatility. The pair traded bearishly to complete 38.2% Fibonacci retracement around 0.6820. Over this level, the AUD/USD has formed a series of bullish and bearish patterns, which are extending mixed sentiment of the market. 

Today, the AUD/USD may trade in a buying mode of over 0.6820 to target 0.6850 and 0.6868. Bearish moves can be seen below 0.6850.  

 

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