AUD analysis 29.01.2020

The Australian dollar fluctuated in a narrow range tilted to the upside during the Asian session, to witness its bounce for the second consecutive session from the lowest since October 16 against the US dollar, following the developments and economic data that it had reported on the Australian economy and on the cusp of developments and economic data expected today Wednesday by The American economy, which includes the decisions and directions of monetary policy makers at the Federal Reserve and the Federal Reserve Governor Jerome Powell's press conference in Washington.

At 2:39 am GMT, the Australian dollar pair rose against the US dollar 0.03% to 0.6764 levels compared to the opening levels at 0.6762, after the pair achieved its highest level during the trading session at 0.6773, while achieving the lowest at 0.6755.

This has been followed by the Australian economy. The leading indicators reading was released by the Melbourne Institute, which showed an increase of 0.1% against stability at zero levels last November. This came before the disclosure of the fourth quarter inflation data with the release of the consumer price index, which showed accelerated growth To 0.7%, compared to 0.5% in the previous reading for the third quarter, outperforming expectations for a 0.6% acceleration in growth.

In the same context, the core reading of the consumer price index showed that the pace of growth was stable at 0.4%, in line with expectations during the fourth quarter, while the annual reading of the consumer price index showed that growth accelerated to 1.8% compared to the previous annual reading and expectations at 1.7%, and the fundamental annual reading of the index reflected The same growth was stable at 1.6% during the fourth quarter, contrary to expectations that growth slowed to 1.5%.

On the other hand, investors are anticipating by the US economy to disclose data for the month of December with the release of the merchandise trade balance reading, which may explain the widening deficit to $ 64.5 billion compared to $ 63.2 billion in conjunction with the release of the initial reading of the wholesale inventory index, which may reflect a rise of 0.1 % Versus a decline of 0.1%, all the way to revealing housing market data with the release of existing home sales, which may show a slowdown in growth to 0.5% versus 1.2%.

This comes in conjunction with the FOMC meeting, on January 28-29, during 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. To be held by Powell Fed Governor half an hour after the FOMC meeting’s activities expire.

We would like to point out that US President Donald Trump just renewed his demand for the Federal Reserve to resume reducing interest on federal funds during its current meeting, in order to maintain interest rates in America compared to other countries, with his statement that if the Federal Reserve decides to cut rates The short-term reference interest is that his country will focus on paying its debts and refinancing it again.

Technical analysis

The Australian dollar versus the US dollar shows some slight bullish bias affected by the stochastic positivity, but since the price is below the broken support for the bullish channel which turns into resistance now at 0.6815, the bearish trend scenario will remain likely for the coming period, noting that we are waiting for the 0.6670 level to be visited as a target Next major.

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

Expected trend for today: bearish.