AUD Analysis 28.10.2019

The Australian dollar fluctuated in a narrow range tilted to decline during the Asian session to witness the bounce for the fourth session in five sessions from the highest since September 16 last against the US dollar amid the lack of economic data by the Australian economy earlier this week and on the eve of developments and economic data expected Monday by the US economy the largest economy in the world.

At 03:08 AM GMT, the AUDUSD fell 0.10% to 0.6816 levels from the opening levels of 0.6823, after the pair reached its lowest level during the session at 0.6812, while the pair achieved the highest at 0.6829.

Investors are awaiting the US economy's preliminary reading of the Wholesale Inventories Index, which may reflect accelerating growth to 0.3% vs. 0.2% in August. Meanwhile, the Trade Balance of Goods Index showed the deficit widened to $ 73.5 billion versus $ 72.8 billion in August comes hours after the report touched on the progress of US-China trade talks last weekend.

On Tuesday, markets are looking ahead to the opening of the Federal Open Market Committee meeting in Washington, which is expected to cut interest rates on federal funds by 25 basis points for the third consecutive meeting to between 1.50% and 1.75% ahead of the Bank Governor's upcoming press conference. Federal Reserve Jerome Powell on Wednesday, following US President Donald Trump's demand for further stimulus and rate cuts.

Investors are also looking to unveil the preliminary third quarter GDP for the United States on Wednesday, which could show a slowing pace of growth for the world's largest economy to 1.6% versus 2.0% in the second quarter. The quarterly growth slowed to 1.8% from 2.4% in the second quarter.

Preliminary data on the US labor market is also expected to be released on Wednesday with the release of the private sector employment change, which may reflect a slower pace of job creation to 125,000 jobs versus 135,000 in September, hours before the release. Monthly Non-Farm Payrolls and Unemployment Rate plus Hourly Income for October.

Technical Analysis

The AUDUSD pair is based on SMA 50, which is a good intraday support floor, accompanied by stochastic reaching the edge of oversold areas, which supports the chances of resuming the expected bullish trend for the coming period, targeting mainly 0.7015.

Therefore, the positive scenario will remain valid and effective unless 0.6785 is broken and remains below it.

Expected trading range for today is between 0.6780 support and 0.6860 resistance.

Expected trend for today: Bullish.