AUD analysis 04.03.2020

The Australian dollar fluctuated in a narrow range tilted to the upside during the Asian session, to witness its bounce to the fourth session from the lowest since 12 March 2009 against the US dollar, following the developments and economic data that were reported by the Australian economy and on the cusp of developments and economic data expected today Wednesday by the US economy The largest economy in the world.

At exactly 03:11 AM GMT, the Australian dollar pair rose against the US dollar by 0.35% to 0.6607 levels compared to the opening levels at 0.6584, after the pair achieved its highest level during the trading session at 0.6615, while the pair achieved its lowest at 0.6577.

We have followed the Australian economy to reveal the fourth quarter growth data with the release of the GDP index, which showed a slowdown in the pace of growth to 0.5% compared to 0.6% in the last third quarter, outperforming the expectations that indicated a 0.4% growth, while the annual reading of the same indicator showed The pace of growth accelerated to 2.2% compared to 1.8% in the previous annual reading for the third quarter, also outperforming the forecasts that indicated the acceleration of growth to 2.0%.

This came hours after the monetary policy makers at the Australian Central Bank on Tuesday cut interest rates by 25 basis points to 0.50% during the Reserve Bank of Australia meeting held on the third of this month, which came in line with expectations, and this comes after the central The Australian stabilized at 0.75% in the previous three meetings, and after reducing it by 25 basis points three times in previous meetings last year.

On the other hand, investors are looking for the US economy to disclose preliminary data for the labor market with the release of the index of change in private sector jobs, which may reflect a slowdown in the pace of job creation to 170 thousand added jobs compared to 291 thousand added jobs last January, before Hours of disclosure of the monthly report of jobs except agricultural and unemployment rates in addition to the hourly rate for the month of February after tomorrow, Friday.

This comes before we witness the issuance of the final reading of the Service Supply Institute index by Marquette about the United States, which may reflect the stability of the contraction at 49.4 unchanged from the initial reading of last month and against a widening at 53.4 in January, and before revealing the reading of the Institute's index Service supply, which may show a shrinkage in capacity to 54.9, compared to 55.5 in January.

We would like to point out that the importance of service provision lies in the fact that the service sector in America represents more than two-thirds of the gross domestic product, and finally the market is looking to unveil the Big Book, whose importance lies in the fact that it is issued two weeks before the meeting of the Federal Open Market Committee, which is scheduled to be held on 17-18 March is expected to reveal the Committee's expectations for the future of interest rates and the rate of growth, inflation and unemployment for the next three years.

This comes hours after the sudden meeting of the Federal Reserve yesterday, during which members of the Federal Open Market Committee decided to reduce the interest on federal funds by 50 basis points to between 1.00% and 1.25% after being installed in the previous two meetings of the Federal Reserve at between 1.50% And 1.75%, and after reducing it three times by 25 basis points in previous meetings last year.

In the same vein, we also followed yesterday, Tuesday, the press conference held by Federal Reserve Governor Jerome Powell after the decision to suddenly reduce markets to short-term benchmark interest rates, through which he noted that the decision came to support the American economy, while touching that over the past years wages increased The labor market has improved and the Committee has repeatedly stressed that the current monetary policy is appropriate.

Powell also expressed yesterday that several risks have arisen and the current situation has become in a state of uncertainty, which made the Federal Committee see the existence of fundamental changes that prompted it to take a reaction, adding that over the next months and weeks the committee will work to monitor markets and developments and take appropriate decisions to support the economy, He explained that the American economy is strong, but it is difficult to determine the extent of the negative effects of the spread of the Corona virus locally and globally.

Powell stressed during the press conference that the committee’s decision to cut interest at Tariq’s meeting for the first time since the global financial crisis that occurred more than a decade ago and by 50 basis points, which is rarely made by the Federal Reserve, is not a political decision but rather stems from a vision The Federal Committee for Current Events, and this came in the wake of US President Donald Trump's call repeatedly for the Federal Reserve and Powell County to cut interest and expand stimulus.

Technical analysis

The Australian dollar versus the US dollar succeeded in touching our awaited target at 0.6630 and maintained its stability without resisting the falling channel that appears in the image, and according to the trading rules inside the price channels, the price will start a descending wave targeting the support of the mentioned channel around 0.6465 initially, supported by the stochastic negativity.

Thus, the bearish bias will be expected during the upcoming sessions unless 0.6620 then 0.6670 levels are breached and stability above it.

The expected trading range for today is between 0.6530 support and 0.6620 resistance.

Expected trend for today: bearish.