Top Trade Setups in Forex - Mixed Risk Sentiment In Play
|The dollar and the safe-haven yen traded bullishly, but the gains remained limited, as a lack of clarity on U.S.-China trade talks kept investors cautious.
U.S. government bonds were in demand as investors' risk appetite shrank. The benchmark U.S. 10-year Treasury yield dropped to 1.745% from 1.783% on Tuesday, extending its decline to a third session.
XAU/USD - Fakeout Pattern Revealed
The safe-haven-metal prices dropped, although the uncertainties increased regarding phase one deal between the United States and China. At the Sino-US front, the United States President Donald Trump gave a warning regarding imposing a more tariff if discussion with China fails.
Besides this, the United States law aimed at protecting human rights in Honk Kong escalated more tension between the United States and China, which are the biggest economies in the world.
On the other hand, Beijing advised the United States to do not intervene in this affair. The risk- tone also weighs down among the on-going of the protests in Hong Kong and Israel.
Notably, President Donald Trump is now carefully t singing the protest bill, because singing the bill will likely leave a negative impact on the impartial trade deal between the Sino-US. The deal was originally expected to be signed at a summit in Chile scheduled for mid-November, but due to cancel the conference, the deadline was left in limbo. The U.S. Federal Reserve's meeting minutes for October, released overnight, also gained some focus.
XAU/USD - Daily Technical Levels
| Support | Pivot Point | Resistance |
| 1460.54 | 1467.29 | 1478.16 |
| 1449.67 | 1484.91 | |
| 1432.05 | 1502.53 |
Gold - XAU/USD- Daily Trade Sentiment
Recalling our previous update, the gold prices have mostly traded in line with our previous forecast. Yesterday, the precious metal exhibited a fakeout setup as it crossed over 1,472 triple top resistance but later reversed back to close 4-hour candle below the triple top level.
Today, gold proceeds to trade with a bearish inclination below 1,470 support mark. New candlesticks, particularly the three black crows pattern on the hourly chart is proposing odds of a bearish reversal in gold. Beneath 1,470 gold can begin further selling unto 1,467 and 1,462. Whereas, above 1,470 gold may find resistance around 1,476.
USD/CAD - BOC Gov Poloz Speaks
The USD/CAD was closed at 1.33018 after placing a high of 1.33274 and a low of 1.32619. Overall the movement of the pair remained Bullish that day.
The USD/CAD jumped to over one month top and crossed the 1.3300 level on Wednesday amid a drop in Crude Oil prices because of the weekly publishing of U.S. Crude Oil Inventories. The Crude Oil Inventories of the United States came in as expected 1.4M and affected the WTI's prices on Wednesday, which in response put pressure on commodity-linked currency - Loonie and gave upward trend to USD/CAD.
From the Canadian side, at 18:30 GMT, the closely watched Consumer Price Index (CPI) from Canada was released as 0.3% for the month of October it came in as expected. The common CPI for the year also remained the same as expected at 1.9%. The Median CPI was as expected as 2.2% but was higher than the previous 2.1%. The Core CPI came in as 0.4%, and the trimmed CPI came in as 2.1%.
The macroeconomic data of the consumer price index from Canada came in as expected and failed to give any significant movement to USD/CAD. However, the late-night release of FOMC October meeting minutes added in the upward trend of USD/CAD on Wednesday. When minutes revealed that the Fed would not cut its rate for the fourth time this year and hold its policy, USD/CAD spiked and broke the level of 1.3300.
Another reason for increased prices of USD/CAD air was the heightened tensions of the U.S. & China due to U.S. Interference in China & Hong Kong affairs. U.S. Senate passed a Hong Kong Human Rights & Democracy Act, which was highly condemned by China. It escalated the prevailing trade tensions and affected stock prices.
USD/CAD- Daily Technical Levels
| Support | Pivot Point | Resistance |
| 1.3278 | 1.3303 | 1.3329 |
| 1.3252 | 1.3354 | |
| 1.3202 | 1.3404 |
USD/CAD - Daily Trade Sentiment
The USD/CAD continues to trade around 1.3300 after violating the descending triangle pattern, which underpinned the pair above the 1.3200 area. The pair has now crossed above 50 periods EMA at 1.3220, and alongside, it has also violated the strong resistance level of 1.3260.
Three white soldiers are still playing on the 4-hour timeframe, and these are signaling odds of more buying until 1.3340. On the lower side, the immediate support stays around 1.3260.
AUD/USD – Aussie Manufacturing PMI Ahead
The AUD/USD was closed at 0.68020 after placing a high of 0.68307 and a low of 0.67899. Overall the movement of the pair remained Bearish that day. At 4;30 GMT, the MI Leading Index of Australia came in as -0.1% the same as the previous one and had almost no effect on AUD/USD prices.
The pair AUD/USD came under pressure on Wednesday when the uncertainty emerged in the market related to the U.S. & China trade war. The tension escalated with the U.S. Senate passing bill against Beijing and in favor of Hong Kong.
The Senate passed an Act of Hong Kong Human Rights and Democracy to support Hong Kong's independence and its protestors. China acted angrily in response and said that the U.S. should stay out of China's internal affairs, or they will retaliate, and only the United States would suffer the consequences.
The U.S. & China already had conflicts on tariffs removal & signing of the phase-one deal in December, and headlines like this added in the tension and created a demand for safe-haven.
Australia is the largest trade partner of China, was also affected by the increased dispute between China & the United States. So, Aussie came under pressure, and AUD/USD started to drop on Wednesday.
The drop in AUD/USD was further escalated after the release of FOMC meeting minutes in a late-night session on Wednesday, which revealed that the Fed would keep its policy on hold for now. This supported the U.S. Dollar and added in the downward pressure of AUD/USD.
AUD/USD - Technical Levels
| Support | Pivot Point | Resistance |
| 0.6788 | 0.6805 | 0.6821 |
| 0.6773 | 0.6838 | |
| 0.6741 | 0.687 |
AUD/USD - Daily Trade Sentiment
The AUD/USD continues to trade in a bearish mode below 0.6830 area as it's been facing 50 periods EMA resistance along with the downward trendline, which is keeping the pair bearish.
Right now, the Aussie is trading at 0.6790, which is also a double bottom pattern. We can expect Aussie to show a slight bullish correction until 0.6820. Closing of 4-hour candles below this is likely to drive more sell-off in the AUD/USD. Therefore, consider staying bearish below 0.6830 to target 0.6770 today.
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