AUD analysis 20.01.2020

The Australian dollar fluctuated in a narrow range tilted to the upside during the Asian session against the US dollar amid the scarcity of economic data earlier this week by the Australian economy and the absence of the American market on Monday due to the holiday celebration day of Martin Luther King in the United States of America.

At 05:16 am GMT, the Australian dollar pair rose against the US dollar by 0.09% to 0.6883 levels compared to the opening levels at 0.6877, after the pair achieved its highest level during the trading session at 0.6885, while achieving the lowest at 0.6873.

This was followed by last weekend's economic data that showed the largest Australian trading partner and largest economy in Asia and the second largest economy in the world 6.1% during 2019 despite the trade dispute between Beijing and Washington, which recently witnessed its breakthrough with the signing of US President Donald Trump and Vice President Chinese State Council and Chairman of the Chinese negotiating team Liu He last Wednesday on the first phase of the trade deal in the White House.

It is noteworthy that the National Bureau of Statistics of China revealed last Friday, a seasonally adjusted reading of the fourth quarter GDP, which showed stable growth at 1.5%, little changed from the previous reading of the third quarter, surpassing expectations that indicated a slowdown in growth to 1.4%, as the reading showed Annual growth of the same index was stable at 6.0% as well, with little change from the previous annual reading for the third quarter, in line with expectations that indicated that.

The office also revealed at the time the annual reading of the retail sales index, which showed stable growth at 8.0%, unchanged from the previous annual reading last November, surpassing expectations that indicated a slowdown in growth to 7.9%, while the annual reading of industrial production showed accelerated growth to 6.9% versus 6.2%, contrary to expectations at 5.9%, and the reading of unemployment rates showed an increase to 5.2% compared to 5.1% in November.

Other than that, we followed last week, and Chinese President Xi Jinping, in a message sent to his US President Donald Trump after the world's two largest economies signed the first phase of the trade agreement, expressed that the agreement reflects that the two parties can resolve differences through dialogue, stating that he hopes to Washington should work for Chinese companies fairly, adding that the two sides should abide by the terms of the agreement to achieve greater progress in joint cooperation between the two countries.

Last week, we followed the report that touched on the fact that the Chinese Vice-Premier Hu noted that the trade agreement between his country and America will not affect the interests of other parties and that China's imports of American agricultural products are based on market principles, explaining that Chinese companies will import American agricultural commodities according to the needs Chinese consumer and market demand and supply, adding that it is not wise to start the second stage negotiations immediately.

On the other hand, then US Vice President Mike Pence said that negotiations for the second phase of the trade agreement between Washington and Beijing have already started, and it is reported that US President Trump noted during the signing of the trade agreement with China that his administration will leave the customs duties imposed on Chinese goods even after the signing of the first phase of The agreement and that the customs duties on Chinese goods will be completely eliminated after the signing of the second stage of the agreement.

Last Wednesday, US Treasury Secretary Stephen Mnuchen also stated that the second stage of the trade agreement will see the abolition of more tariffs, while stating that the first stage has a comprehensive and implementable mechanism and that China has agreed to put laws to fulfill its obligations, expressing that some outstanding issues including technology and security The cyber will be worked on in the second stage, adding that Huawei's crisis is not an obstacle in the relationship between the United States and China.

Technical analysis

The AUDUSD pair is showing negative trades to press SMA 50, which could push the price to test the bullish channel support before trying to rise again.

Until now, the positive scenario remains valid unless 0.6880 then 0.6800 levels are broken and stability below it, noting that we are waiting for the visit of 0.7015 as a next main target.

The expected trading range for today is between 0.6865 support and 0.6940 resistance

Expected trend for today: bullish