AUD analysis 12.03.2020

The Australian dollar fluctuated in a narrow range tilted toward the decline during the Asian session to witness the lowest since the beginning of this week, when it tested the lowest since the tenth of March 2009 against the US dollar amid the growing fears of an outbreak of the Corona virus globally and in the wake of the developments and economic data that followed On the Australian economy and on the cusp of developments and economic data expected today, Thursday, by the US economy, the largest economy in the world.

At 2:16 am GMT, the Australian dollar pair fell against the US dollar by 0.31% to 0.6464 levels compared to the opening levels at 0.6484, after the pair achieved its lowest level during the trading session at 0.6451, while it achieved the highest at 0.6492.

We followed up on the Australian economy, the Melbourne Institute's reading of consumer expectations of inflationary pressures, which showed stability at 4.0% during March, and that comes hours after the World Health Organization yesterday announced a global pandemic virus and statements by the Director-General of the World Health Organization, Tiedros Adhanum, "We are very concerned Among the levels of spread and hidden danger, and levels of worrying inaction, "adding," We have sounded the alarm loudly and clearly. "

In another context, we also followed yesterday the Australian government announced a health package worth A $ 2.4 billion ($ 1.56 billion) and the statement that it will provide "unprecedented support through primary care, care for the elderly in addition to hospitals, research and the national medical inventory", according to the latest figures released From the World Health Organization, the number of cases infected with the Coronavirus has increased to more than 118,000, and 4,292 people have died from infection in 114 countries.

We also followed earlier this week the speech of Reserve Bank of Australia Deputy Governor Jay Debbel at the Australian Financial Review Business Summit in Sydney, in which he stressed that any quantitative easing measures that the Australian central bank will adopt will focus on "yield targets rather than setting the level of bond purchases", He explained that any stimulus that the Bank of Australia will adopt will focus on its intended results and will not depend on setting a specific level for the bond purchase.

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 a 0.1% contraction versus 0.5% growth last January, while a substantial reading of the same indicator may show a slowdown in growth to 0.1 % Versus 0.5%, and the annual reading of the same indicator may show a slowdown in growth to 1.8% versus 2.1%, while the substantial annual reading of the index may reflect stability at 1.7%.

This also comes in conjunction with the issuance of the index of subsidy requests for the last week on the seventh of this month, which may show an increase by two thousand requests to 218 thousand applications compared to 216 thousand requests in the previous weekly reading, as may read the reading of the index of subsidy requests continued for the last week on 29 of Last February, an increase of 4 thousand requests to 1,733 thousand requests compared to 1,729 thousand requests in the previous weekly reading.

Other than that, we have just followed the press conference held by US President Donald Trump, during which he announced the suspension of all travel to Europe and a number of incentive measures, which included urging Congress to agree to an unspecified procedure for salary tax exemptions, expressing his confidence that America will limit One of the dangers it might pose, but his speech did not give investors the confidence that the United States is tightening its grip on the virus.

In another context, we followed yesterday, US Secretary of Finance Stephen Manuchin expressed during his testimony about the budget proposed by the Trump administration for the fiscal year 2021/2022 before the Subcommittee on Foreign Operations and Related Programs in Washington, that public health is the highest priority for the US government In this budget, with reference to it being approved by Congress to allocate $ 8 billion to fight against Corona.

The US Secretary of Finance Manuchin also stated that the International Monetary Fund and the World Bank are committed to providing adequate financial support to tackle the Corona virus, while expressing the fact that the US government aims to provide liquidity and direct financing to small and medium-sized projects and that the fiscal stimulus package will coincide with the reduction of salary taxes, indicating that it will be pumped Hundreds of billions of dollars in the American economy coinciding with tax cuts.

Technical analysis

The Australian dollar versus the US dollar is resuming its negative trading to approach the descending channel support which represents our first awaited target at 0.6430, and we expect the negative pressure to continue to achieve more negative targets that extend to 0.6230.

Therefore, we will maintain our expectations for the downside trend that gets continuous support from the EMA50, noting that stability below 0.6565 is a prerequisite for the suggested decline to continue.

The expected trading range for today is between 0.6380 support and 0.6520 resistance.

Expected trend for today: bearish.