AUDUSD analysis 07.04.2020

The Australian dollar rose during the Asian session to witness its bounce to the third session from its lowest since March 26 against the US dollar after the developments and economic data that it reported on the Australian economy, which includes the activities of the Australian Central Bank meeting in Sydney and on the cusp of developments and economic data expected today Tuesday from Before the American economy, the largest economy in the world.

At 02:32 am GMT, the Australian dollar pair rose against the US dollar by 0.43% to 0.6114 levels compared to the opening levels at 0.6088, after the pair achieved its highest level during the trading session at 0.6129, while achieving the lowest at 0.6076.

On the Australian economy, we followed the disclosure of the services index reading by the Australian Industrial Group (AIG), which reflected the widening of the contraction to 38.7 compared to 47.0 last February, and this came before we witnessed the disclosure of preliminary data for the Australian labor market with the release of a reading The job advertisements index showed a decline of 10.3% compared to a rise of 1.2% in February.

In conjunction with the release of the trade balance reading, which indicated that the surplus has shrunk to A $ 4.36 billion from A $ 4.75 billion in January, contrary to expectations that the surplus will shrink to A $ 3.75 billion, and this comes in conjunction with the activities of the Reserve Bank of Australia meeting and before the disclosure The Australian Central Bank released its interest rate statement amid expectations that interest rates would be fixed at all-time low of 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, investors are currently awaiting by the US economy the disclosure of labor market data with the release of a job reading and job turnover that may reflect a decrease to 6.55 million compared to 6.96 million in January, and that comes before we witness the release of the consumer credit reading That may show accelerated growth to $ 13.9 billion, compared to $ 12.0 billion in January.

It is noteworthy that US President Donald Trump recently warned that the coming period is "painful" for America, after he announced earlier last month that the quarantine would be extended in the United States until the end of this April to limit the spread of the Corona virus, according to the latest figures issued by The organization has increased the number of cases infected with the virus to nearly 1,215 thousand and 67,841 people were killed in 211 countries.

Otherwise, markets are looking to tomorrow, Wednesday, for the Federal Reserve to disclose the minutes of the Federal Open Market Committee meeting that took place 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 that approved the makers The Fed's monetary policy returns 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 after the members of the committee cut the interest three times by 25 basis points in previous meetings last year.

Technical analysis

The Australian dollar versus the US dollar pair starts trading today with an upward trend to breach the 0.6097 level and try to hold above it, and we notice that the price is moving inside an ascending channel that appears in the above chart, which supports the chances of achieving more gains during the upcoming sessions, to return to the bullish correction path, whose next target exists At 0.6236.

Thus, the bullish bias will be likely during the upcoming sessions, supported by the move above SMA 50, indicating that breaking 0.6097 then 0.6035 levels will stop the expected rise and press the price to drop again.

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

Expected trend for today: bullish.