AUDUSD analysis 31.08.2020

The Australian dollar fluctuated in a narrow range sloping upward during the Asian session, to witness its highest since the fourth of December of 2018 against the US dollar before the economic developments and data that were followed on Monday by the Australian economy and the Chinese economy, Australia's largest trading partner, amid scarce economic data At the start of this week by the US economy the largest in the world.

At exactly 03:45 am GMT, the Australian dollar against the US dollar rose 0.18% to 0.7365 levels compared to opening levels at 0.7352, after the pair achieved its highest level in nearly two years at 0.7381, while its lowest level during the session's trading is at 0.7346. The pair started the session on a descending gap after ending last week’s trading at 0.7365 levels.

And we followed up on the Australian economy. The Melbourne Institute (MI) revealed a reading of the inflation gauge, which showed a slowdown in growth to 0.1% compared to 0.9% last July, while the annual reading for the index itself showed stability at 1.3%, and this came before we see the release of the reading. Total operating profits for companies, which indicated an acceleration of growth to 15.0%, compared to 1.4% in the first quarter last quarter, contrary to expectations that indicated a 6.0% decline.

This came in conjunction with the release of the private sector credit index reading, which showed a contraction of 0.1%, in line with expectations, compared to 0.2% in June, while the annual reading of the same index showed a slowdown in growth to 2.4% compared to 2.9%, and this comes hours before the activities of the bank meeting. The Australian Central Bank and the Reserve Bank of Australia tomorrow, Tuesday, unveiled the interest rate statement amid expectations that the interest rate will be fixed at its lowest level ever at 0.25%.

In another context, we have just followed up on the disclosure of the China Federation of Logistics and Procurement (CFLP) of the industrial and service sector data for the past month, which indicated that the industrial sector's expansion decreased to a value of 51.0 compared to the previous reading for July and expectations at 51.1, while the service sector expanded to what Its value was 55.2 compared to 54.2 in July, contrary to expectations for a narrowing of the breadth to 54.0.

On the other hand, markets are looking forward to the speech of a member of the Federal Open Market Committee and Deputy Governor of the Federal Reserve, Richard Clarida, who is scheduled to participate in a hypothetical discussion on monetary policy hosted by the Peterson Institute for International Economics, and this comes in the wake of the Federal Reserve’s announcement on the sidelines of the Jackson Hole meetings adopting a policy New for inflation and average inflation targeting two percent above for some time.

Technical analysis

The Australian dollar against the US dollar provided new positive trades to reach the close of the second awaited target at 0.7400, to continue moving within the ascending channels that appear in the image, and get continuous positive support from the EMA 50, waiting for more upside to head towards areas of 0.7485 that represent the next target .

Consequently, the bullish trend will remain valid and effective for the upcoming period, bearing in mind that the breach of 0.7325 may pressure the price to start a downside corrective wave targeting 0.7240 areas before any new attempt to rise.

The expected trading range for today is between 0.7320 support and 0.7440 resistance

The expected general trend for today: Bullish