AUD analysis 02.02.2020

The Australian dollar rose during the Asian session to reflect its retracement for the second session from the lowest since 12 March 2009 against the US dollar after the developments and economic data that were reported by the Australian economy and on the cusp of developments and economic data expected today Monday by the US economy, the largest economy in the world.

At 02:37 am GMT, the Australian dollar pair rose against the US dollar by 0.74% to 0.6535 levels compared to the opening levels at 0.6487, after the pair achieved its highest level during the trading session at 0.6536, while the pair achieved its lowest at 0.6460, with Knowing that the pair started the trading session on a falling price gap after it concluded the trading of the month and last week at 0.6515.

On the Australian economy, we followed the disclosure of the AIG manufacturing reading, which showed the contraction widened to 44.3 compared to 45.4 last January, and this came before the Melbourne Institute (MI) revealed the inflation gauge reading Which showed a contraction of 0.1% against a growth of 0.3% in January, while the annual reading of the same indicator showed that the growth slowed to 1.6% compared to 1.8%.

Up to the disclosure of the reading of the operating profit index for companies, which showed a widening decline of 3.5% compared to 0.6%, which adjusted from a decline of 0.8% in the third quarter, worse than expectations that indicated a decline of 1.2%, and this came in conjunction with the disclosure of preliminary data for the Australian labor market with The release of the job advertisements reading, which showed a rise of 0.7% compared to a rise of 0.4% last December.

Other than that, the markets are looking to tomorrow, Tuesday, for the decisions and directions of monetary policy makers at the Reserve Bank of Australia with the release of the Australian Central Bank statement of interest rates amid expectations to reduce them by 25 basis points to 0.50% after fixing the previous meeting for the third consecutive meeting in the wake of reducing it last year three times by 25 basis points to 0.75%, before we witness tomorrow, Wednesday, the disclosure of growth data for the past fourth quarter.

On the other hand, investors are currently awaiting by the US economy the disclosure of the final reading of the manufacturing PMI by Markit about the United States, which may reflect the stability of the expansion at a value of 50.8, little changed from the initial reading of last month and compared to 51.9 in December, And that is before we witness the release of the construction spending index, which shows a 0.6% increase compared to a 0.2% decline last November.

This comes in conjunction with the disclosure also by the largest industrialized country in the world about the reading of the Institute of Industrial Supply index, which may show a shrinkage of amplitude to 50.5 compared to 50.9 in December, as the reading of the Institute of Industrial Supply measured in prices may show a shrinkage of breadth to what Its value is 51.2 compared to 53.3 in December.

Technical analysis

The Australian dollar pair traded against the US dollar with a strong negative yesterday to achieve our awaited target at 0.6500 and approach the 0.6400 barrier, noting that the price bounces up to approach the resistance of the descending channel that appears in the picture, pending the resumption of the main downside trend, which reaches its next target to 0.6345.

Therefore, we will continue to suggest the bearish trend unless the 0.6635 level is breached and stability above it is established.

The expected trading range for today is between 0.6450 support and 0.6570 resistance.

Expected trend for today: bearish.