Top trade setups in forex – US $2.2 trillion support package in highlights!
|The U.S. stock indexes came off session highs to close mixed. Earlier in the day, Senate lawmakers and the Trump administration agreed on a giant 2-trillion-dollar coronavirus relief bill, which was expected to pass through Senate in the evening.
The Dow Jones Industrial Average once gained over 1,300 points or 6.0%, but surrendered a large part of those gains in the last trading hour, closing at 21,200 (+495 points or 2.4%). The S&P 500 ended 28 points higher (+1.2%) at 2,475, while the Nasdaq 100 reversed course to the downside closing 84 points lower (-1.1%) at 7,469.
XAU/USD - Weaker Dollar Supports Bullion
On Thursday, the precious metal gold trades sideways in a narrow trading range of 1,631 - 1,600. On Thursday, the precious metal gold prices fell during the Asain session, but the European session brought some bullish bias in the market.
U.S. official data showed that durable goods orders (preliminary reading) rose 1.2% on month in February (-0.9% expected). The Mortgage Bankers Association's Mortgage Applications dropped 29.4% on the week for the week ended March 20.
Later today, initial jobless claims for the week ended March 21 are expected to surge to 1.50 million from 281,000 in the prior week. Fourth-quarter GDP (third reading) is expected to remain at +2.1% (annualized) on the quarter, and February wholesale inventories (preliminary reading) are expected to fall 0.2% on the month.
XAU/USD - Daily Technical Levels
|
Support |
Pivot Point |
Resistance |
|
1646.71 |
1669.45 |
1696.48 |
|
1619.68 |
1719.22 |
|
|
1569.91 |
1768.99 |
XAU/USD - Daily Trade Sentiment
The technical side of the market exhibits choppy sessions within a narrow trading range of 1,605 - 1,633. The massive amount of spread has limited the trading activity in the precious metal gold. A bullish breakout of gold prices can help determine further trends in gold. On the higher side, a bullish breakout of 1,633 level can lead the precious metal gold prices until 1,640 and 1,645. Looking at the RSI, it's trying to come out of the oversold zone level. We should look for buying trades above 1,633 and bearish trades below 1,669.
USD/CAD - Pair Dropped Below 1.4200
The USD/CAD is flashing red and dropped to the lower end of its daily trading range below 1.4200, mainly due to weaker broad-based U.S. dollar. However, the pair failed to get support from the fresh declines in the oil prices, which weaken the Loonie. The USD/CAD is trading at 1.4186 and consolidates in the range between the 1.4166 - 1.4276.
The currency pair succeeded in gaining some positive traction during the early part of Thursday trading hours. They got support from the weaker oil prices, which tend to weaken demand for the commodity-linked currency the Loonie.
The WTI crude oil prices dropped on Thursday, failed to continue its three consecutive days of a recovery streak, due to concerns regarding decreasing demand in the wake of the coronavirus-led travel bans. The currency pair is holding around weekly lows, and some follow-through weakness might be seen as a fresh trigger for bearish traders, which should set the stage for an extension of the recent sharp pullback from multi-year tops.
Despite allowing over the $2.2 trillion aid package on the previous day, the U.S. policymakers are still unclear about the performance while the Democrats show disappointment and signal amendments. However, the final bill vote is still pending and may take some direction after considering the latest signal from the policymakers.
USD/CAD - Daily Technical Levels
|
Support |
Pivot Point |
Resistance |
|
1.3389 |
1.3414 |
1.3449 |
|
1.3354 |
1.3475 |
|
|
1.3294 |
1.3535 |
USD/CAD - Daily Trade Sentiment
The USD/CAD has traded in line with our previous forecast and continued it's trading below 50 EMA resistance level of 1.4280. Closing of candles below this level suggested chances of a selling trend in the USD/CAD prices, and it indeed leads the pair towards 1.4080 support.
Now, this level is working as strong support for the USD/CAD pair, and we may see a slight bullish correction until 1.4200 area before seeing more selling in the pair. While on the lower side, the violation of 1.4086 support level can extend selling until 1.3945 and 1.3870.
AUD/USD – EMA Crossover
The AUD/USD pair recovered from the Asian session low to 0.5960 after the U.S. Senate passed COVID-19 Bill. However, the final bill vote is still pending and may take some direction after considering the latest signal from the policymakers. The AUD/USD is trading at 0.5959 and consolidates in the range between the 0.5870 - 0.5960.
The U.S. Senate finally passed the much-awaited coronavirus (COVID-19) stimulus package bill. The estimated $2.0 trillion aid package plan could ignore the calls to improve jobless claims benefits from the opposition Democrats.
However, the final vote in the lower house is still pending, while the policymakers have gone on the holiday period till April 20. As in result, the House Speak Nancy Pelosi earlier ordered for a 24-hour notice to call the Senators from the off to vote, which in turn low probabilities of the bill to turn into the law before late-Friday.
The U.S. coronavirus numbers sharply increased and rose 12,000 in one day while the death toll crossed the 1,000 marks. As in result, the market sentiment is likely to have supported the recent news with the U.S. 10-year treasury yields bouncing back beyond 0.80%.
The investors will keep their eyes on the U.S. jobless claims as it is likely to register extreme numbers due to the virus pandemic. However, the COVID-19 headlines will take the driver seat.
AUD/USD - Technical Levels
|
Support |
Pivot Point |
Resistance |
|
0.6605 |
0.6631 |
0.6669 |
|
0.6568 |
0.6695 |
|
|
0.6504 |
0.6758 |
AUD/USD - Daily Trade Sentiment
The AUD/USD prices edged higher, trading mostly bullish at 0.6046 level. On the 4 hour chart, the pair has crossed over 50 periods EMA at 0.5985, and closing of 4-hour candle above this level suggests a strong bullish bias of the pair. Aussie is also gaining bullish momentum in the wake of improvement in China's coronavirus cases. At the same time, the U.S. is injecting more stimulus into the market, which is making it weaker.
The AUD/USD prices are soaring higher to target the next resistance level of around 0.6105. The leading technical indicators are in bullish support, and these are pretty much likely to lead AUD/USD higher. Let's look for buying trades above 0.6000 today.
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