AUDUSD analysis 19.05.2020

The Australian dollar fluctuated in a narrow range tilted to the upside during the Asian session, to witness the highest level since May 11 against the US dollar, following developments and economic data that were reported by the Australian economy and on the cusp of developments and economic data expected today Tuesday by the US economy, which includes a testimony of the governor Federal Reserve Jerome Powell and US Treasury Secretary Stephen Mnuchin before the Senate.

At 02:43 am GMT, the Australian dollar pair rose against the US dollar by 0.08% to 0.6529 levels compared to the opening levels at 0.6524, after the pair achieved its highest level in a week at 0.6551, while it achieved its lowest during the trading session at 0.6515.

We have followed the Australian economy, the Reserve Bank of Australia revealed the minutes of its last meeting, which was held on the fifth of this month, during which the monetary policymakers of the Australian Central Bank approved stabilizing short-term reference interest rates for the second consecutive meeting at the lowest ever at 0.25%. Which came in line with expectations at the time.

The minutes stated that the Australian central bank will not increase the interest until the economy shows progress towards full employment and sustainable inflation within the target range between 2 ~ 3% and that the speed and timing of the economic recovery are uncertain and that it is ready to increase its purchases of bonds, and investors are looking after tomorrow, Thursday, for the participation of a governor Reserve Bank of Australia Philip Lowe at a panel discussion at the Institute of Financial Services Australia in Sydney.

On the other hand, the markets are currently awaiting the release of the housing market data by the US economy, with the release of both the beginning construction index and the building permit index, and amid expectations that building permits will reflect the widening decline to about 1.00 million permits compared to about 1.35 million permits in March. In the past, the readings for homes that were constructed may reflect the widening decline to about 0.95 million homes compared to about 1.22 million homes in March.

This comes before we witness Federal Reserve Governor Jerome Powell and US Treasury Secretary Stephen Mnuchin about the relief assistance that has been approved by the Federal Reserve and the US Treasury to reduce the repercussions of the coronavirus outbreak, in addition to their testimony about the economic security law before the Banking, Housing and Urban Affairs Commission In the US Senate in Washington via satellite.

This comes hours after Powell warned last Sunday in the "60 Minutes" program that the economic downturn may continue until late 2021, explaining that his country's economic downturn may reach between 20% and 30% "easily" during the current quarterly quarter with the outbreak of a virus epidemic. Corona, explaining that he expected "the economy to recover steadily during the second half of this year," as long as America avoids "the second wave of the virus."

Powell then noted that "it is very important to avoid this. It will be devastating to the economy and public confidence," adding that "assuming there is no second wave of the virus, I think you will see the economy recover steadily during the second half," explaining that "in order for the economy to fully recover". A vaccine must wait, "Powell also called on US lawmakers to pass more economic incentives and relief aid, while telling him that unemployment rates could peak at 25%.

In another context, we followed this weekend, the American President expressed through his official account on the tension that all Japan, India, Britain, Canada, New Zealand, Indonesia, Russia and all member states of the European Union support Australia in requesting an international investigation against the spread of Coronavirus And that his country would also support Australia in that investigation.

Other than that, the markets are also looking at later in the day for the activities of the Group of Seven major industrial meeting, which is scheduled to discuss measures to mitigate the negative economic repercussions of the spread of the Coronavirus, via satellite, and this comes in conjunction with measures to reopen the US economy and many other global economies Gradually and the return of life to normal.

Technical analysis

The Australian dollar versus the US dollar continues to rise to approach our first waited target at 0.6550, awaiting further rise supported by the move above the EMA50, noting that the breach of the mentioned level is considered the key to the rally towards 0.6685 as the next main station.

In general, we will continue to suggest the bullish trend for the next period unless 0.6407 level is broken and stability below it.

The expected trading range for today is between 0.6460 support and 0.6600 resistance.

Expected trend for today: bullish.