Top trade setups in forex – Eyes on US and Canadain labor market report!

The U.S. stock indexes advanced 3%, lifted by shares in Automobiles & Components (+8.37%), Real Estate (+7.41%) and Energy (+6.74%) sectors. The Dow Jones Industrial Average jumped 779 points (+3.4%) to 23433, the S&P 500 gained 90 points (+3.4%) to 2750, and the Nasdaq 100 was up 180 points (+2.2%) to 8229.

Today, the primary focus will stay on the U.S. Labor Department will release March PPI (+0.5% on-year expected), and initial jobless claims in the week ended April 4 (5 million expected). The Commerce Department will report the final readings of February wholesale inventories (-0.5% on month expected). The University of Michigan will publish its Consumer Sentiment Index for April (75.0 expected).

Despite positive earnings reports, the market seems to trade with the risk-off sentiment, driving the gold prices higher.

 

XAU/USD - Bullish Bias Continues to Dominate

The yellow metal gold prices grew 1% on safe-haven buying before a long weekend and an important gathering of top oil producers, with bullion also cinching on to gains in broader markets amid concerns the coronavirus pandemic was close to peaking.

Regarding U.S. economic data, the Mortgage Bankers Association's Mortgage Applications declined 17.9% on week in the week ended April 3, compared with +15.3% in the week before. Later today comes Initial Jobless Claims for the week ended on April 4 (5.25 million expected), Producer Prices (-0.4% on month in March expected), Wholesale Inventories (February final reading, -0.5% on month expected), and the University of Michigan's Consumer Sentiment Index (April preliminary reading, 75.0 expected) will be reported.

The U.S. Labor Department will release March PPI (+0.5% on-year expected), and initial jobless claims in the week ended April 4 (5 million expected). The Commerce Department will report the final readings of February wholesale inventories (-0.5% on month expected). The University of Michigan will report its Consumer Sentiment Index for April (75.0 expected).

The release of positive economic data from the United States is likely to keep the gold prices under pressure due to its negative correlation with gold.

 

XAU/USD - Daily Technical Levels

Support	Pivot Point	Resistance
1628.08	1651.78	1687.6
1592.25		1711.3
1532.73		1770.83

 

XAU/USD - Daily Trade Sentiment

The technical side of gold continues to exhibit bullish bias as the pair is trading above a strong resistance to becoming a support level of 1,649. We can see bullish candles over 1,642 level, which is suggesting indecision among traders. An upward trendline and 50 periods EMA on the 4 hour time is demonstrating a chance of bullish trend continuation in the market.

On the higher side, gold may find immediate resistance around 1,665, and bullish breakout of this may offer buying until 1,671. While support continues to hold around 1,643. Let's consider taking bullish trades over 1,651 levels to target 1,666 and 1,671.

 

USD/CAD - Choppy Session Remain Intact

The USD/CAD currency pair did not stop its previous session winning streak despite broad-based greenback weakness. As well as, buyers even ignored a strong intraday rally in crude oil prices, which tend to weakened demand for the commodity-linked currency. At the press time, the USD/CAD currency pair is currently trading at 1.4045 and consolidates in the range between the 1.3999 - 1.4056.

After the previous session's intraday pullback, the pair succeeded to regain some positive traction for the second straight session even after a USD subdued trading action on Thursday. As we already mentioned that the pair's gains seemed rather unaffected by a combination of negative factors. However, traders are keenly awaited the important macro data, OPEC+ meeting for fresh direction.

At the USD front, the U.S. dollar continues to get weak in the wake of the latest optimism about forecasts that the coronavirus pandemic may be reaching its peak soon. As well as, the mildly weaker tone surrounding the U.S. Treasury bond yields further weighed on the greenback demand.

On the other hand, the currency pair buyers ignored recent bullish rally in crude oil prices, which tend to support the Candian dollar commodity-linked currency. Albeit failed to attract fresh selling around the pair. The expectation that the world's largest oil producers would agree to cut production at a meeting later in the day also supporting oil prices.

 

USD/CAD - Daily Technical Levels

Support	Pivot Point	Resistance
1.4068	1.4127	1.4172
1.4023		1.4231
		1.4335

 

USD/CAD - Daily Trade Sentiment

Technically, the commodity currency pair USD/CAD is trading slightly bullish at 1.4060, but still lingering in the same trading area of 1.4245 - 1.4080. On the 4 hour timeframe, the USD/CAD pair extends to consolidate inside a descending triangle pattern, which is anticipated to support the USD/CAD at 1.3990. The USD/CAD may encounter immediate resistance around 1.4108 and 1.4130, which is extended by the descending triangle pattern.

Usually, these descending triangle patterns break on the lower side, this the pair may shift downwards, particularly if 1.3990 level gets violated. Beneath 1.3990, the USD/CAD pair may present another drop until the next support level of 1.3735. Let's look for sell trades below 1.4127 today.

 

AUD/USD – Triple Top Pattern Breakout

The AUD/USD dropped from the session high of 0.6250 to currently down 0.20 near the 0.6220 after the RBA’s FSR highlighting the coronavirus (COVID-19) risk. The currency pair failed to extend its positive momentum but still trading in the bullish territory. The currency pair is trading at 0.6244 and consolidates in the range between the 0.6196 - 0.6250.

The Financial Stability Report (FSR) showed that the Aussie financial system was robust initially before the coronavirus outbreak. The bi-annual report also mentioned, intensified uncertainty about the pandemic is increasing the usual volatility in financial markets now. The upbeat comments from U.S. President Donald Trump earlier in the morning about the economic re-start, as well as updates for the COVID-19 clinical trials, supported the risk-tone to extend the previous strength.

The broad-based U.S. dollar weakness caused by the weaker tone surrounding the U.S. Treasury bond yields also collaborated towards limiting any further drop for the pair. As in result, the U.S. 10-year Treasury yields drop one basis point (bp) to 0.75% while Japan's NIKKEI marks 0.50% loss to 19,260. Even so, Australia's ASX 200 remains 1.80% up to 5,300 due to expectations of further stimulus.

 

AUD/USD - Technical Levels

Support	Pivot Point	Resistance
0.6151	0.6198	0.6281
0.6069		0.6328
0.594		0.6457

 

AUD/USD - Daily Trade Sentiment

The AUD/USD continues to trade with a bullish bias at 0.6250 level, especially after violating the triple top resistance level of 0.6200. Aussie is getting more influential in the wake of betterment in China, as they ended the lockdown in Wuhan, indicating that's are likely to come back to normal sooner than expected. The AUD/USD has closed a few candles over 0.6200 resistance level, which is now working as a support and may drive buying in the AUD/USD until the next resistance level of 0.6310.

The leading indicators such as RSI and lagging indicator like EMA is suggesting a bullish trend in AUD/USD pair, which can lead it's prices further higher until 0.6320 while continues to hold around 0.6190. Let's look for placing bullish trades over 0.6200 and selling below the same. 

 

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