AUD analysis 16.12.2019

The Australian dollar fluctuated in a narrow range tilted towards the decline during the Asian session, to witness a succession of its rebound from above since July 26 against the US dollar, following the developments and economic data that it had released earlier this week on the Australian economy and on the cusp of developments and economic data expected on Monday from Before the American economy the largest economy in the world.

At exactly 02:09 AM GMT, the Australian dollar pair fell against the US dollar by 0.15% to 0.6882 levels compared to the opening levels at 0.6892, after the pair achieved its lowest during the trading session at 0.6870, while achieving the highest at 0.6895, knowing, the pair started the trading session on an upward price gap after it concluded the trading last week at 0.6876 levels.

This we have followed the disclosure of the initial reading of the Markit Industrial and Services PMI for Australia for the month of December, which showed the expansion of the industrial sector to 49.4 compared to 49.9 last November, and the service sector expanded to a value of 49.5 compared to 49.7 And that came back from a contraction of 49.5 in November.

This came, before we witness the Australian Treasury unveiled its economic and financial forecasts for the middle of the fiscal year 2019/2020, which expires on June 30, which included achieving a surplus of 6.1 billion Australian dollars, without previous expectations, last April with a surplus of 11.0 billion Australian dollars. This came with lowering growth expectations to 2.25% from 2.75% and lowering wage growth expectations to 2.50% from 2.75%.

In the same context, Australian Treasury Minister Josh Friedenberg expressed through his statement that the forecasts contain "significant write-offs of revenues against the backdrop of global and local economic headwinds," while denouncing the concern about the economic slowdown and opposition to calls for additional spending, such as what was announced Recently in both New Zealand and Japan, expectations for the government's cash balance have also been lowered to below A $ 5.0 billion.

On the other hand, investors are anticipating by the US economy the disclosure of industrial sector data with the release of the New York Industrial Index reading, which may reflect a widening of what amounted to 5.1 compared to 2.9 last November, and that comes before we witness the release of the initial reading of the manufacturing PMI Markit is for the US, which may reflect the stability of the expansion at 52.6, little changed from November.

This comes in conjunction with the disclosure of the primary reading of the Markets PMI for the United States, which may reflect a widening of 52.0 compared to 51.6 in the previous reading of November, leading to the disclosure of housing market data with the release of the housing index reading before The National Association of Home Builders, which may reflect stability at 70 in November.

Technical analysis

The Australian dollar versus the US dollar pair shows some bearish tendency to approach the moving average test 50, where the price is affected by the negative stochastic indicator, while the bullish channel continues to carry the price to achieve more expected rise for the coming period, waiting for positive trading to test the 0.7015 level mainly.

Therefore, we will maintain our bullish expectations over the intraday basis unless the 0.6770 level is broken and stability below it.

The expected trading range for today is between 0.6830 support and 0.6930 resistance.

Expected trend for today: bullish.