AUD analysis 28.01.2020

The Australian dollar fluctuated in a narrow range slanting toward a decline during the Asian session, to witness the lowest since October 16 against the US dollar, following developments and economic data that were reported by the Australian economy and on the cusp of developments and economic data expected on Tuesday by the American economy, which includes a recorded conversation For the Member of the Federal Open Market Committee and President of the New York Federal Reserve Bank John Williams.

At exactly 02:34 AM GMT, the Australian dollar versus the US dollar fell 0.16% to 0.6750 levels compared to the opening levels at 0.6761, after the pair achieved its lowest level in more than three months at 0.6747, while achieving the highest during the trading session at 0.6762.

On the Australian economy, we have followed the Australian National Bank’s business confidence index for the month of December, which showed a contraction of 2 against stability at zero levels in the previous reading last November, while the same indicator of confidence in the current conditions showed a contraction Widen to 3 vs. 4 in November.

On the level, investors are currently watching by the US economy to disclose the reading of the durable goods orders index, which represents about half of consumer spending, which represents more than two-thirds of the gross domestic product in the United States, which may reflect a rise of 1.2% compared to a decline of 2.1% in November , And the core reading of the same index may also show a 0.4% increase compared to a 0.1% decline in November.

This comes before we witness the disclosure of the US housing market data with the release of the seasonally adjusted reading of the S&P composite of house prices 20 which may reflect slowing growth to 0.3% compared to 0.43% in the previous monthly reading last October, while the reading may appear Annual growth in the same index accelerated to 2.5%, compared to 2.2% in October.

Up to the Federal Reserve Board member and President of the New York Federal Reserve John Williams made the opening remarks on the Puerto Rico Beach program in San Juan, via a pre-recorded video, before revealing the reading of the consumer confidence index, which may appear widening to 128.2 compared to 126.5 in December, and the Richmond Industrial Index reading, which may reflect a contraction of 3 to 5 in December.

This comes in conjunction with the start of the FOMC meeting today and tomorrow, Wednesday, in Washington, in which it is expected that the short-term benchmark interest rates for the third consecutive meeting will be maintained between 1.50% and 1.75%, and look forward to the press conference’s activities. Federal Reserve Governor Jerome Powell tomorrow, Wednesday, half an hour after the FOMC meeting ends.

Markets are also looking after tomorrow, Thursday, to disclose the preliminary reading of the gross domestic product of the United States for the fourth quarter, which may show the acceleration of the pace of growth for the largest economy in the world to 2.2% compared to 2.1% in the third quarter, while the initial reading may reflect the GDP measured in prices from Last quarter, the pace of growth stabilized at 1.8%, little changed from what it was in the third quarter.

Technical analysis

The Australian dollar versus the US dollar is showing a further bearish tendency to continue the expected decline in the intraday and short term, on its way to visit the previously recorded bottom at 0.6670 as the next main station.

SMA 50 supports the expected decline, which will remain valid unless the price rushes to breach the 0.6875 level and stability above it.

The expected trading range for today is between 0.6700 support and 0.6800 resistance.

Expected trend for today: bearish.