AUDUSD analysis 20.05.2020

The Australian dollar fluctuated in a narrow range tilted to the upside during the Asian session, to witness its bounce to the fourth session from the lowest since May 7 against the US dollar, following the developments and economic data that it had reported on the Australian economy and on the cusp of developments and economic data expected today Wednesday by the US economy The largest economy in the world.

At 2:37 am GMT, the Australian dollar pair rose against the US dollar by 0.15% to 0.6547 levels compared to the opening levels at 0.6537, after the pair achieved its highest level during the trading session at 0.6561, while it achieved its lowest at 0.6525.

We have followed the Australian economy to reveal the reading of the leading indicators, which showed a decline in the decline to 0.3% compared to 0.5% last March, and this came before we witnessed the issuance of the reading of the leading indicators by the Melbourne Institute, which indicated the decline in the decline to 1.5% compared to 0.7% In March, up to the disclosure of the seasonally adjusted preliminary reading of the retail sales index, which reflected a decline of 17.9% compared to a rise of 8.5% in March.

This comes, hours after the Reserve Bank of Australia disclosed 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 decided to fix short-term benchmark 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 yesterday that the Australian central bank will not increase the interest until the economy shows progress towards full employment and inflation in a sustainable manner 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 tomorrow, Thursday, investors are looking forward to 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, markets are currently awaited by the US economy, as the Federal Reserve revealed the minutes of the Federal Open Market Committee meeting held on April 28-29, in which it decided to stabilize interest on federal funds at zero levels between zero and 0.25%. , Which came in line with expectations at the time, amid stressing the way forward in using all tools to support the American economy in these difficult times.

It is reported that members of the Federal Committee expressed at the end of last month that the outbreak of the Coronavirus had 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 reduce inflationary pressures while benefiting That this health crisis will broadly affect economic activity and the labor market as well as inflation.

The members of the Federal Committee also mentioned at the time that interest rates are expected to remain at zero levels to support the flow of credit to families and companies and that the Federal Reserve is moving forward in purchasing treasury bonds at $ 500 billion per month and mortgage bonds at least $ 200 per month when the economy showed signs of recovery in the wake of overcoming the current crisis and achieving price stability in addition to an improvement in the labor market.

The Federal Committee also stated at the time that it would continue to follow 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 What is needed.

Other than that, yesterday we followed the statements of Federal Reserve Governor Jerome Powell and US Treasury Secretary Stephen Manuchin before the Senate Satellite Banking, Housing, and Urban Affairs Committee, and Powell emphasized that the Federal Reserve will keep interest rates at zero levels until recovery Economy and achieving the goal of inflation, and he is committed to using all his tools to support the economy in this difficult period

Technical analysis

The Australian dollar versus the US dollar pair shows a bearish bounce after testing the broken support for the upside channel that appears in the image, which turns into resistance now at 0.6595, affected by the stochastic negativity, and the price needs to obtain a positive momentum sufficient to push trades to resume the main bullish trend, the next target of which is located at 0.6685.

In general, we continue to favor the bullish trend for the next period supported by the EMA50 unless the 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.