AUD Analysis 05.09.2019

The Australian dollar rose during the Asian session to witness a rebound for the third consecutive session from the lowest since August 7, when it tested the lowest since March 18, 2009 against the US dollar following the developments and economic data that followed from the Australian economy and on the threshold Economic developments and data expected on Thursday by the US economy, the largest economy in the world.

At 02:43 am GMT, the Australian dollar against the US dollar rose 0.31% to 0.6818 levels, compared to the opening levels at 0.6797, after the pair achieved its highest since early August at 0.6825, while achieving the lowest during the trading session at 0.6794.

The Australian economy followed the release of the Trade Balance figure which showed that the surplus shrank to A $ 7.27 billion from A $ 7.98 billion in June, surpassing expectations for a surplus of A $ 7.20 million. Hours after the second quarter growth data showed growth in line with expectations.

On the other hand, investors are awaiting the US economy to release preliminary data for the labor market with the release of the indicator of the change in the private sector jobs, which may reflect the slowing pace of job creation to 148 thousand jobs added from 156 thousand jobs added last July. Hours before the release of the monthly report on non-farm payrolls and unemployment rates in addition to the hourly income rate for August.

This comes before we also witnessed by the largest economy in the world to reveal the final reading of the productivity index and the cost of one work, and is expected to show the productivity index slower growth to 2.2% compared to 2.3% growth in the initial reading for the second quarter and against 3.4% growth in the previous reading For the first quarter, while the cost index reading may show growth accelerated to 2.5% compared to 2.4% in the initial reading and against a contraction of 1.6% in the first quarter.

This comes in conjunction with the release of the jobless claims figure for the past week at the end of August, which may reflect stability at 215K, unchanged from the previous weekly reading, while the jobless claims reading for the week past August 24 may show a decline. 10 thousand applications to 1,688 thousand applications compared to 1,698 thousand applications in the previous weekly reading.

The Markit Institute for Services PMI final reading for the US may reflect an expansion to 51.0 compared to 50.9 in August and 53.0 in July, before the ISI reading may be released. It expanded to 54.0 from 53.7 in July, coinciding with the release of factory orders which could show growth accelerated to 1.0% from 0.6% in June.

Technical Analysis

AUDUSD has managed to reach our first awaited target at 0.6830, and we expect the upside bias to continue to test the resistance of the major downside channel at 0.6910 before resuming the bearish main trend again.

Therefore, we will continue to favor the bullishness over the coming sessions unless 0.6740 is breached and stability below it.

Expected trading range for today is between 0.6770 support and 0.6880 resistance.

Expected trend for today: Bullish.