AUDUSD Analysis 18.12.2018

The Australian dollar fluctuated in a narrow bullish range during the Asian session against the US dollar to see its rebound to a third session of its lowest since early November following the economic developments and data that followed on the Australian economy and on the eve of developments and economic data expected Tuesday by the US economy the world's largest economy.

At 0320 GMT, the AUDUSD rose 0.13% to 0.7188 compared to the opening levels at 0.7179, after reaching a high of 0.7200, while reaching a low of 0.7173.

We have followed the Australian economy to disclose the minutes of the Reserve Bank of Australia meeting held on December 4 in Sydney, in which monetary policy makers approved the setting of short-term benchmark interest rates at 1.50% for the 26th consecutive meeting, In line with analysts' expectations at the time.

On the other hand, investors are looking for the US economy to reveal the housing market data with the reading of the Construction Starts Index and the Construction Permit for the last month. The reading of the Building Permits Index is expected to decrease to 0.4% at 1,260,000 vs. 0.6% While the reading of the Construction Starts Index may indicate a slowdown in growth to 0.2% at 1.230 thousand homes compared to 1.5% at 1,228 thousand homes.

Markets are also looking closely at the FOMC meeting to be held today and Wednesday in Washington, where monetary policy makers are expected to raise federal funds rates by 25 basis points for the fourth time this year to between 2.25% and 2.50% and move forward in reducing the repurchase of government bonds and mortgage bonds.

The Federal Reserve is expected to unveil growth and inflation expectations as well as future short-term benchmark interest rates for the next three years, looking for any hints about the future tightening of monetary policy and the pace of raising federal funds over the coming period in shadow. The US president's criticism of the Fed's radical policies and the recent momentum of economic data.

Technical Analysis

AUDUSD tested the 0.7200 level yesterday, and the price is under continuous negative pressure coming from SMA 50, while Stochastic is showing negative signs now.

Therefore, we believe that opportunities are available to resume the bearish trend during the coming sessions, while targeting 0.7080 and then 0.7020 as the next major stations, noting that the continuation of the expected decline depends on stability below 0.7277.

The trading range for today is expected among the support at 0.7080 and resistance at 0.7220

The general trend for today is bearish