AUDUSD analysis 01.04.2020

The Australian dollar fluctuated in a narrow range slanting back down during the Asian session to witness its bounce for the second consecutive session from the top since March 16 against the US dollar following the developments and economic data that they followed about the Australian economy, which included the disclosure of the stimulus of the Australian Central Bank meeting and on the cusp of Economic developments and data expected today by the US economy, the largest economy in the world.

At 02:05 am GMT, the Australian dollar pair declined against the US dollar by 0.29% to 0.6113 levels compared to the opening levels at 0.6131, after the pair achieved its lowest level during the trading session at 0.6109, while achieving the lowest at 0.6159.

We have followed on from the Australian economy the release of the manufacturing index reading by the Australian Industrial Group (AIG), which showed a widening to 53.7 compared to a contraction at 44.3 last February, and this came before we witness the Reserve Bank of Australia unveiling the minutes of its meeting held on 19 March March, in which he suddenly decided to cut interest rates by 25 basis points, to the lowest ever level to 0.25%.

It is noteworthy that the Reserve Bank of Australia Governor, Philip Lowe Noh at the time, because the sudden rate cut came as part of efforts to support his country's economy from the repercussions of the global outbreak of the Corona virus, while expressing the fact that at some point the virus will be contained and the economy will recover, pointing out that in the meantime, one of the priorities The Australian central bank supports jobs, income, and companies, so that when the health crisis is limited, the country is well positioned to recover strongly.

In the same vein, Lowe also stated at the time that short-term benchmark interest rates will not be increased until progress is made toward full employment, while confirming his confidence that inflation will be sustainably within the target range between two and three percent, adding that the return target on Australian government bonds with a three-year term at around 0.25% and that this will be achieved by purchasing government bonds on the secondary market.

Lowe also explained that the Australian central bank will provide financing facilities for a period of three years to accredited institutions at a fixed rate of 0.25% and that these institutions will be able to obtain initial financing of up to 3% of the existing credit and will have the possibility of obtaining additional financing if they increase lending to businesses, especially small companies And medium, indicating that credit facilities are estimated at least 90 billion Australian dollars.

Lowe also emphasized that the Bank of Australia is moving forward in providing liquidity to the Australian financial markets through conducting repurchases for one month and three months within daily market operations until further notice, in addition to conducting long-term repo operations for at least six months or longer per week as long as the Market conditions require this, while expressing that the Australian financial system will be resilient and in a good position to deal with the effects of the virus.

We would like to point out that the sudden reduction of the short-term benchmark interest rates by the Bank of Australia's last reserve came less than three weeks after reducing it in the third meeting of March by 25 basis points to 0.50% and after stabilizing it in the previous three meetings after it was lowered year Last three times, 25 basis points, to 0.75%.

Other than that, we also followed up on the Australian economy a little while ago to disclose data on the housing market with the release of the Building Permits Index, which showed a rise of 19.9% ​​compared to a decline of 15.1%, which adjusted from a decline of 15.3% last January, outperforming expectations that indicated An increase of 3.1%, as the annual reading of the same index showed an increase of 0.8% against a decline of 0.4%, which was modified from a decline of 0.3% in the previous annual reading.

On the other hand, investors are currently awaiting by 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 the loss of 150 thousand jobs compared to 183 thousand added jobs in February, and this comes hours before the disclosure after Tomorrow, Friday, the monthly report for jobs except agricultural and unemployment rates, in addition to the average hourly earnings for the month of March.

Markets are also looking to reveal the final reading of the manufacturing PMI by Markit for the United States, which may reflect the widening contraction to 48.2 compared to 49.2 in the initial reading last month and against expansion at 50.7 in February, before we witness the release of the spending index reading On construction, which shows growth slowed to 0.6% versus 1.8% in January.

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 contraction to 44.9 compared to a expansion at 50.1 in February, while a reading of the Institute of Industrial Supply measured in prices may indicate the extent of the contraction to 41.6 Versus 45.9, and we would like to point out, because the reading reading at a value of 50 or higher reflects a widening, while its reading below 50 indicates a contraction.

Technical analysis

The Australian dollar versus the US dollar tested the 0.6097 level and maintains its stability above it until now, to start attempts to return to the bullish channel that appears in the picture, noting that the stochastic indicator provides a positive crossover now, which constitutes a positive incentive that we expect to contribute to push the price to rise during the sessions Coming.

Therefore, the bullish trend scenario will remain intraday, provided that the price maintains its stability above 0.6097, while noting that our next main target is at 0.6236.

The expected trading range for today is between 0.6050 support and 0.6236 resistance.

Expected trend for today: bullish.