AUDUSD analysis 30.04.2020

The Australian dollar fell during the Asian session to witness its rebound from above since March 10 against the US dollar, following developments and economic data that it had reported on the Australian economy, and in the wake of developments and economic data that were followed by the Chinese economy, Australia's largest trading partner, and on the cusp of developments and economic data expected Today, Thursday by the US economy the largest economy in the world.

At exactly 02:52 AM GMT, the Australian dollar pair declined against the US dollar by 0.21% to 0.6543 levels compared to the opening levels at 06557, after the pair achieved its lowest level during the trading session at 0.6530, while achieving the highest in seven weeks at 0.6559 .

We have followed on from the Australian economy the release of the import price index, which showed a 1.0% decline compared to a 0.7% increase in the fourth quarter, worse than what indicated an acceleration of growth to 1.0%, while the reading of the export price index reflected a 2.7% increase compared to a 5.2% decline in the fourth quarter This came in conjunction with a reading of the private sector credit showed that growth accelerated to 1.1% compared to 0.4% last February, contrary to expectations at 0.3%.

This came before we saw the CFLP unveil the readings of the Industrial and Service Purchasing Managers' Index, which indicated that the expansion of the industrial sector shrank to 50.8 compared to 52.0 last March, below expectations that the expansion would decrease to 51.0, while the sector expanded The service accounted for 53.2 compared to 52.3 in March, beating expectations for a expansion of 52.7.

Otherwise, yesterday, we followed up on China accusing Australia of describing it as a pathetic fraud, in response to Australia's continuous efforts to conduct an international investigation into the outbreak of the Corona virus, which started at the end of last year in the Chinese city of Wuhan and spread later globally, which reflects tensions In diplomatic and economic relations between countries.

It is noteworthy that Australian Prime Minister Scott Morrison recently noted that the investigation proposed by his country is aimed at knowing how to develop and spread the coronavirus and not targeting China, while emphasizing the importance of this matter because Corona has killed more than 200 thousand people around the world and caused the global economy to slow down, and this came Following the warnings of the Chinese ambassador to Australia, Jinji Cheng last Monday, of his country's boycott of Australian products.

In another context, we also followed yesterday yesterday to keep Moody's credit rating on its rating to Australia at the "AAA" level with a warning of the potential expanded economic downturn in Australia, which may reach five percent during this year due to the implications of healing the Corona virus, with the benefit that it is economic conditions In Australia it remains strong despite the negative repercussions of coronavirus outbreaks.

On the other hand, investors are currently awaiting by the US economy the issuance of the index of subsidy requests for the last week on April 25, which may reflect a decline of 927 thousand requests to 3,500 thousand requests compared to 4,427 thousand requests in the previous weekly reading, while it may appear reading requests The ongoing benefit for the last week on the 18th of this month, increasing by 3,262 thousand applications to 19,238 thousand applications compared to 15,976 thousand requests.

This comes in conjunction with the disclosure of personal spending and income data, which may reflect a decrease in personal spending by 4.8% against a rise of 0.2% in February, and a decrease in personal income by 1.6% against a rise of 0.6% in February, as the reading of the personal consumption expenditures index may show. Al-Jawhary declined 0.1% compared to a 0.2% increase in February.

It also comes in conjunction with the disclosure of the reading of the unit cost index, which may reflect the stability of growth at 0.7%, little changed from what it was in the last quarter, and before we witness the disclosure of industrial sector data for the largest industrial country in the world with the release of the index reading Chicago Purchasing Managers, which may reflect the widening contraction to 38.0 compared to 47.8 last March.

Otherwise, yesterday we followed the Fed’s monetary policymakers ’decision to keep short-term benchmark interest rates at zero levels between zero and 0.25% at the FOMC meeting April 28-29, which came in line with expectations And, members of the Committee stressed that they are moving forward in using all the tools of the Federal Reserve to support the US economy in these difficult times.

In the same context, members of the Federal Open Market Committee discussed the fact that the outbreak of the Coronavirus has caused human and economic suffering within the United States and abroad and that the preventive measures adopted by countries globally weigh on economic activity and that the decline in demand and the collapse of oil prices reduces inflationary pressures while benefiting That this health crisis will broadly affect economic activity and the labor market in addition to inflation.

The members of the Federal Committee also mentioned that the interest rate on federal funds is expected to remain at zero levels to support the flow of credit to families and companies and that the Federal Reserve is going ahead with the purchase of treasury bonds at $ 500 billion per month and mortgage bonds at least $ 200 per month until the economy has shown signs of recovery following the current crisis and stabilizing prices, as well as an improvement in the labor market.

The Federal Committee also stated that it will continue to follow the economic data and data related to health care and global developments and assess the current and expected conditions within its work to reach the goal of inflation at two percent and achieve the maximum benefit in the labor market, adding that it will monitor the market conditions closely and is ready to amend its tools if It took that.

The decisions and directions of the Federal Committee came yesterday, hours after the preliminary reading of the GDP of the United States showed the contraction of the largest economy in the world by 4.8% during the first quarter, and before we witnessed, Federal Reserve Governor Jerome Powell expressed in the press conference held half an hour after the expiry of the meeting’s activities. The Federal Committee, on his expectations of the contraction of his country's economy in an unprecedented way in the second quarter due to the Coronavirus.

Technical analysis

The Australian dollar versus the US dollar is showing a further bullish tendency to move away from the previously breached 0.6500 level, on its way to visit the recently recorded summit of 0.6685, which represents our next positive stop.

Consequently, the bullish trend scenario will remain valid and active during the upcoming sessions, organized within the bullish channel that appears in the picture, noting the importance of stability above 0.6407 for the continuation of the expected rise.

The expected trading range for today is between 0.6480 support and 0.6630 resistance.

Expected trend for today: bullish.