AUD analysis 19.02.2020

The Australian dollar fluctuated in a narrow range tilted to the upside during the Asian session, to witness its bounce to the second session from the lowest since February 10 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 on Wednesday by the US economy These include the FOMC panel talk and the release of the FOM minutes.

At 02:26 am GMT, the Australian dollar pair rose against the US dollar by 0.16% to 0.6697 levels, compared to the opening levels at 0.6686, after the pair achieved its highest during the trading session at 0.6701, while achieving the lowest at 0.6684.

This has been followed up on the Australian economy by the release of the leading indicators reading by the Melbourne Institute, which showed an increase of 0.1% against stability at zero levels last December, and this came before the disclosure of labor market data with the release of the wage price index, which showed stable growth at 0.5% are in line with expectations during the fourth quarter, as the annual reading of the same index showed stability in growth of 2.2% also in line with expectations.

On the other hand, investors are currently awaiting by the US economy the disclosure of the producer price index reading, which is an initial indicator of inflation, which may reflect the stability of growth at 0.1% compared to during December, while the fundamental reading of the same indicator may show acceleration of growth to 0.2% against 0.1%, in conjunction with a speech by Federal Reserve Board member and President of Cleveland Bank Loretta Mister at the Women's Executive Forum in Philadelphia.

This also comes in conjunction with the disclosure of housing market data, with the release of both the beginning construction index and the building permit index, and amid expectations that the reading of the building permits index will reflect a 2.1% increase to about 1,450 thousand permits compared to a decline of 3.9% at 1,416 thousand permits in December / December, while the reading of the index of start-up homes, may reflect a decline of 12.0% to about 1,415 thousand homes compared to a rise of 16.9% at 1,608 thousand homes.

Reaching the upcoming event today, the Federal Reserve revealed the minutes of the Federal Open Market Committee meeting held on January 28-29, in which the Federal Reserve monetary policy makers decided to keep interest rates on federal funds at between 1.50% And 1.75% for the third consecutive meeting at the time.

Technical analysis

The Australian dollar versus the US dollar trades stable near the 0.6670 level, and we wait for the breach of this level to confirm the continuation of the bearish trend in the intraday and short term, where our next target is located at 0.6560.

The stochastic and the moving average 50 provide negative signals that support the chances of achieving the required break, to keep our expectations for the bearish direction for the coming period, provided that the price maintains its stability below 0.6754.

The expected trading range for today is between 0.6650 support and 0.6720 resistance.

Expected trend for today: bearish.