AUD Analysis 30.10.2019

The Aussie fluctuated in a narrow, bearish range during the Asian session to witness a rebound for the second session from its highest since October 22, when it tested its highest since September 16 against the US dollar following the developments and economic data that followed from the Australian economy. Economic developments and data are expected to be released on Wednesday by the US economy, which will include the decisions and directions of the Federal Open Market Committee and the upcoming press conference of Federal Reserve Governor Jerome Powell.

At 03:53 AM GMT the AUDUSD fell 0.07% to 0.6860 levels from the opening levels of 0.6865, after the pair reached its lowest level during the session at 0.6849, while the pair achieved the highest at 0.6849.

The Australian economy followed the release of the housing market data with the Housing Industry Association's New Home Sales showing that growth slowed to 5.7% from 7.3% in August, before inflation data was released with the release of the release. The CPI reading showed that growth slowed to 0.5% in line with expectations versus 0.6% in the previous quarter.

In the same context, the core reading of the CPI showed that growth stabilized at 0.4%, little changed from the previous reading in the second quarter, in line with expectations, while the annual reading of the CPI showed that the acceleration of growth to 1.7% against 1.6% In the annual reading prior to the second quarter, consistent with expectations that indicated the same proportion.

The core annual CPI reading showed growth at 1.6% unchanged from the second quarter, also in line with expectations, hours after Reserve Bank of Australia Governor Philip Lowe delivered a speech titled "Some Echoes of Melville" in an annual lecture. Public hosted by the Australian National University in Canberra in which he expressed the view that interest rates should remain low for a while.

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 change in private sector jobs, which may reflect the slower pace of job creation to 125 thousand jobs added to 135 thousand jobs added in September, hours before The monthly report on non-farm payrolls and unemployment rates, as well as the hourly rate of income for the month of October.

The market is then looking to reveal the preliminary GDP figure for the US for the third quarter, which may show a slower pace of growth for the world's largest economy to 1.6% versus 2.0% in the second quarter, and the preliminary GDP reading measured in prices for the quarter. The quarterly pace of growth slowed to 1.8% from 2.4% in the second quarter.

This comes in conjunction with the FOMC meeting in Washington, which is expected to cut interest rates on federal funds by 25 basis points for the third meeting in a row to between 1.50% and 1.75%, and before we witness the upcoming press conference of the Federal Reserve Governor Jerome Powell, following US President Donald Trump's demand for more stimulus and interest rate cuts.

Powell noted earlier that the risks to the US economy were the uncertainty over the trade war between Washington and Beijing and the issue of the exit of the United Kingdom from the European Union. The Pacific (APEC), as well as Brussels's agreement on Monday to extend the Brexit until January 31, limits the chances of a rate cut at the Fed meeting.

Technical Analysis

AUDUSD is showing a slight bullish bias in an attempt to resume the bullish corrective trend, and SMA 50 continues to provide positive support for the price, keeping the positive scenario valid for the next period, awaiting activation of the positive effect of the double bottom pattern shown in the chart above. The main target is located at 0.7015.

On the other hand, it should be noted that breaching 0.6785 and holding below it will stop the expected rally and bring the price back to the main bearish path again.

Expected trading range for today is between 0.6820 support and 0.6920 resistance.

Expected trend for today: Bullish.