AUD Analysis 29.10.2019

The Aussie fluctuated in a narrow, bullish range during the Asian session to see its 12th rebound in 20 sessions from its lowest since March 18, 2009 against the US dollar as the Reserve Bank of Australia Governor Philip Lowe gives a speech titled “Some Echoes of Melville” In an annual public lecture hosted by the Australian National University in Canberra and on the eve of developments and economic data expected Tuesday by the US economy, which includes the start of the meeting of the Federal Open Market Committee.

At 02:12 am GMT, the Australian dollar against the US dollar rose 0.12% to 0.6846 levels compared to the opening levels at 0.6838, after the pair reached its highest level during the trading session at 0.6847, while the pair achieved the lowest at 0.6836.

Investors are currently awaiting the US economy to release the housing market data with the release of the annual S&P House Price Index which may show growth accelerated to 2.1% from 2.0% in July, before we see the release of existing home sales. It may show a slowdown in growth to 0.9% versus 1.6% last August.

This comes in conjunction with the release of the Consumer Confidence reading, which may show an expansion to 128.2 vs. 125.1 last September, leading to the start of the meeting of the Federal Open Market Committee in Washington, which is expected to reduce the interest rate on federal funds by 25 points The basis for the third consecutive meeting is between 1.50% and 1.75%.

In the same context, the markets are looking forward on Wednesday after the end of the second day of the meeting of the Federal Open Market Committee about half an hour of the upcoming press conference of the Federal Reserve Governor Jerome Powell, which will present the decisions and directions of the Federal Reserve Committee, before opening the field for media questions. At the same time, US President Donald Trump has called for further stimulus and interest rate cuts.

Powell has already noted that the risks to the US economy are the uncertainty over the US-China trade war and the Brexit dossier. Trump yesterday expressed his expectation of a trade deal with China at the Asia-Pacific Economic Cooperation summit. APEC next month in Chile, as well as Brussels' agreement yesterday to extend the Brexit until January 31, limits the chances of a rate cut at the Fed meeting.

Otherwise, investors are also looking ahead tomorrow to reveal the preliminary GDP reading for the US for the third quarter, which may show a slower pace of growth for the world's largest economy to 1.6% vs. 2.0% in the second quarter, and may reflect the preliminary reading of GDP measured in prices For the last quarter, growth slowed to 1.8% from 2.4% in the second quarter.

On Wednesday, the US labor market is set to release preliminary data, 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. On the monthly report on non-farm payrolls and unemployment rates plus hourly earnings for October.

Technical Analysis

AUDUSD is resuming its positive trading after moving on SMA 50, where the bullish scenario remains valid for the coming period, supported by the positive signal provided by Stochastic now, waiting for the direction towards 0.7015, which is our next main target.

Note that the continuation of the expected rise requires stability above 0.6785.

Expected trading range for today is between 0.6810 support and 0.6900 resistance

Expected trend for today: Bullish