AUDUSD analysis 06.04.2020

The Australian dollar fluctuated in a narrow range tilted to the upside during the Asian session, to witness its bounce for the second session from the lowest since March 26 against the US dollar, following the developments and economic data that we followed earlier this week on the Australian economy and amid the scarcity of economic data today Monday before The American economy is the largest economy in the world.

At 02:23 am GMT, the Australian dollar pair rose against the US dollar by 0.12% to 0.6016 levels compared to the opening levels at 0.6009, after the pair achieved its highest level during the trading session at 0.6049, while achieving the lowest at 0.5990, knowing The pair started the trading session on an upward price gap after it concluded the trading last week at 0.5997 levels.

We have followed the Melbourne Institute's (MI) disclosure of the inflation gauge reading, which showed 0.2% growth versus a 0.1% contraction last February, while the annual reading of the same indicator showed that the growth slowed to 1.5% versus 1.6%, and that comes hours before the launch The revelations of the Reserve Bank of Australia meeting and the Reserve Bank of Australia revealed the interest rate statement tomorrow, Tuesday, amid expectations that interest rates will be fixed at the lowest level ever at 0.25%.

It is noteworthy that Australian Central Bank Governor Philippe Loe Noh after the March 19 meeting, which was held suddenly and through which interest rates were reduced by 25 basis points, 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 Build at some point the virus will be contained and the economy will recover.

Lowe then expressed that one of the Reserve Bank of Australia’s priorities is to support jobs, income and companies, so that when the health crisis is limited the country will be in a good position to recover strongly, while stating that interest rates will not be increased until progress is made toward full employment, while emphasizing his confidence In that the inflation will be sustainably within the target range between two and three percent.

Lowe mentioned that the target of returning on Australian government bonds of three years at about 0.25% and that this will be achieved by purchasing government bonds in the secondary market, explaining 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 those institutions will be able Initial financing of up to 3% of outstanding credit.

He also stated that the institutions will have the possibility of obtaining additional financing if they increase lending to businesses, especially small and medium companies, explaining that the credit facilities are estimated at least by 90 billion Australian dollars, with his assurance that the Bank of Australia is moving forward in providing liquidity to the financial markets. Australian by making repurchases of one and three months in daily market operations until further notice.

In the same context, the Governor of the Central Bank of Australia noted last month that the Bank of Australia will carry out 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 enjoy flexibility and is in a good position to deal with the effects of The virus, as investors look to tomorrow, Tuesday to reveal the reading of the trade balance index for the past month.

On the other hand, we have recently followed the warning of US President Donald Trump that the coming period is "painful" for his country, after he recently announced the extension of the quarantine in America until the end of this month to limit the spread of the Corona virus, and according to the latest figures released by the organization, the number of HIV-infected cases reached nearly 1,137,000, and 62,955 people were killed in 208 countries.

Otherwise, the markets are looking to tomorrow after the Federal Reserve to disclose the minutes of the Federal Open Market Committee meeting held on the 15th of March, that surprising meeting of the Federal Reserve, which was the second in less than two weeks after the previous sudden meeting on the third of the same month, which was approved Federal Reserve monetary policy makers return their short-term benchmark interest rates to zero levels.

The members of the Federal Open Market Committee reduced the interest on federal funds at the time by 100 basis points to between zero levels and 0.25%, which remained since 2008 until the meeting of 27-28 October 2015, after reducing them in the previous emergency meeting by 50 points The basis is between 1.50% and 1.75%, and this comes in the wake of the committee members cutting interest three times by 25 basis points in previous meetings last year.

Technical analysis

The Australian dollar against the US dollar continues to crawl negatively to continue approaching our first target 0.5958, and continues to move within the descending channel that appears in the picture, which supports the chances of breaking the mentioned level and opening the way for visiting the 0.5787 level as a next station.

Consequently, the downside direction is likely to remain intraday and short term, noting that 0.6097 breakout will lead the price to make more bullish correction and visit 0.6236 initially.

The expected trading range for today is between 0.5900 support and 0.6100 resistance.

Expected trend for today: bearish.