Top Trade Setups in Forex - U.S. Shino Trade Talks Eyed!

On Monday, the market is showing corrections in response to solid moves made on NFP figures. 

The United States' nonfarm payroll report continued to impact the market, driving the bullish trend in the greenback and stocks. The U.S. Labor Department data showed that employers added 266,000 jobs in November - the most since 312,000 in January.

Besides, the Employment Change for November from Canada showed a massive decline to -71.2K against the expectations of 10.0K and weighed heavily on the Canadian Dollar. The Unemployment Rate from Bank of Canada also showed an increase to 5.9% against the expectations of 5.5% for November and added in the pressure of the Canadian Dollar.

 

XAU/USD - Choppy Session In-Play

The safe-haven-metal prices un-hedged during the day in the wake of the United States and China trade worries. Most of that rally in gold was later reversed due to the release of U.S. employment data for November, which set investors off again on risk sentiment.

The positive jobs figures also halted almost any chance of the Federal Reserve cutting rates for a 4th-straight month when it meets this Wednesday to assess economic growth.

However, gold mostly remains unchanged on Tuesday as attention stays on the December 15 deadline set by the United States for a trade deal with China. Without a partial agreement at least by Sunday, the U.S. will likely impose extra tariffs on a new $160 billion swathe of Chinese goods, including toys and smartphones.

However, the U.S. Agriculture Secretary Sonny Perdue said the Trump administration might hold off on the additional tariffs after China's recent move to waive some of its tariffs on U.S. pork and soy imports.

 

XAU/USD - Daily Technical Levels

Support Resistance 

1464.34 1486.32

1451.14 1495.1

1429.16 1517.08

Pivot Point 1473.12

 

Gold - XAU/USD - Daily Trade Sentiment

On Tuesday, gold is trading around 1,460 levels, having produced an inverted hammer pattern, which is supported by a sharp bearish sentiment. 

Typically, these sorts of patterns arouse bullish reversals in gold. However, Friday's close was strongly bearish, exhibiting substantial bearish bias. In the case that gold continues to trade bullish above 1,458 support, the possibility of 23/6% Fibo retracement and 38.2% retracement at 1,463 and 1,466 resides moderately stable. Conversely, the violation of the 1,457 level can drive sell-off until 1,453 mark.

 

USD/CAD - Completes 32.8% Fibo Retracement

The USD/CAD pair was opened at 1.3251 and has placed a high of 1.3266 and a low of 1.3221 since then. Overall the trend for pair has remained bearish throughout the day, and the pair is currently trading at 1.3229.

At 18:13 GMT, the Canadian Housing Starts for November were unchanged at 201K but were above the expectations of 200K and supported Canadian Dollar. However, the Building Permits at 18:30 GMT were released, which came in negative as -1.5% against the expectations of 3.5% and weighed on the Canadian Dollar.

The Canadian Dollar remained busy last week when it touched the lowest level below 1.32 and the highest level above 1.33. The pair gained traction after the employment numbers from Canada fell by a remarkable 71.2K, its worst decline since January 2018. The rise in the unemployment rate of Canada also added in the bullish bias of USD/CAD last week when the rate jumped to 5.5%.

The pair USD/CAD dropped 0.19% on Monday in the absence of significant macroeconomic data on the back of crude oil performance.

Crude oil remained in demand throughout last week because of OPEC production cut decision in its latest meeting. The WTI Crude Oil rose to $60 last week and has supported the Canadian Dollar, which has weighed on USD/CAD prices. The drop in prices of USD/CAD on Monday were also because of strength in crude oil prices and its effect on a commodity-linked currency -Loonie, which in turn weighed on the pair. 

The U.S. dollar remained under pressure on Monday amid the increased uncertainty over the US-China trade deal ahead December 15 when the United States is due to impose tariffs on Chinese goods.

 

USD/CAD- Daily Technical Levels

Support Resistance 

1.3192 1.329

1.3133 1.3329

1.3034 1.3428

Pivot Point 1.3231

 

USD/CAD- Daily Trade Sentiment

The financial markets and its currency pairs are still pricing in the U.S. nonfarm payroll figures. The USD/CAD traded dramatically, bullish on the announcement of NFP data. However, the USD/CAD exhibited some correction as it drops below the 1.3270 resistance level complete 38.2% Fibonacci retracement at 1.3225. 

Continuation of bearish retracement can lead the USD/CAD currency pair towards 1.3200 today. The MACD is still bullish, but the histogram is very close to 0; therefore, we should keep a close eye on this. If the pair manages to drop even below 1.3200, the next stop can be around 1.3160 for the USD/CAD. 

 

AUD/USD – 50 EMA Support, Brace for Breakout Setup

The AUD/USD pair was opened at 0.68306 and has placed a high of 0.68383 and a low of 0.68200 since then. Overall the trend for AUD/USD has remained bearish for the day, and currently, the pair is moving at 0.68297.

The pair snapped its four-week losing streak last week but also seemed to be having a tough time pushing higher yesterday. The pair kept moving sideways throughout the day below 0.6830 and dropped almost 0.12%.

The driving factor of AUD/USD on Monday in the absence of any macroeconomic data from both sides was the uncertainty prevailing in the market surrounding the US-China trade deal.

Less than a week remained for the U.S. to impose new tariffs on Chinese goods, and still, there are no signs for documentation of phase-one deal from any side.

Both sides are giving positive comments and gestures, but uncertainty in the market remained because traders want some real evidence this time. Talks have been going since the trade war has started, and there is no progress made in real terms to reduce the trade tensions.

Traders are reluctant to react on just comments for now just before a new tariff hike from the U.S. and are eager to know what would happen if China and the United States failed to reach the phase-one trade deal agreement by December 15 this year.

Uncertainty is weighing on china-proxy Aussie and keeping the AUD/USD pair under pressure at the starting day of the week.

The governor of Reserve Bank of Australia will give a speech on Tuesday, and the Bureau of Statistics from Australia will release the Housing Price Index for the third quarter, which is expected to increase 0.2% from the second quarter's 0.7%. 

 

AUD/USD - Technical Levels 

Support Resistance 

0.6826 0.686

0.6808 0.6875

0.6774 0.6909

Pivot Point 0.6842

 

AUD/USD - Daily Trade Sentiment

On Tuesday, the AUD/USD is trading sideways after completing 38.2% Fibonacci retracement at 0.6820. Right now, the AUD/USD currency pair is trading just above the 50 periods EMA support level of 0.6820. 

A bearish breakout of 0.6820 level can extend selling until 0.6800. The MACD value still holds below 0, signaling the chances of a bearish trend continuation in Aussie. Let's look for buying above 0.6825 and selling below the same level.

 

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