AUDUSD analysis 22.09.2020

The Australian dollar fluctuated in a narrow range that tends to decline during the Asian session, to witness its lowest since August 26 against the US dollar, following the speech of the Assistant Governor of the Reserve Bank of Australia, in charge of the Risk Management Committee, Jay Debel and on the cusp of economic developments and data expected today, Tuesday, by the American economy. The largest economy in the world, which includes the testimony of Federal Reserve Governor Jerome Powell to Congress.

At 04:28 GMT, the Australian dollar against the US dollar fell 0.01% to 0.7223 levels, compared to opening levels at 0.7224, after the pair achieved its lowest level in four weeks at 0.7192, while its highest during the session’s trading at 0.7235.

We have followed up on Jay Dibel, Assistant Governor of the Reserve Bank of Australia, in charge of the Risk Management Committee, giving a speech under the title "Australian Economy and Monetary Policy" via satellite at the Australian Industry Group Conference, in which he expressed that the decline in the Australian dollar will benefit the economy and that the Australian Central Bank Closely watched "mixed" experimental evidence of negative rates.

The Assistant Governor of the Reserve Bank of Australia, in charge of the Risk Management Committee, Debel also stated that the policy options for reducing the target return and the rate of facilitating financing for the term are an option for the Australian central bank and that the Australian central bank is evaluating other policy options, explaining that increasing the facilitation of term financing is a great easing of monetary policy, adding Intervention in the foreign exchange market is ineffective in the current circumstances.

On the other hand, investors are awaiting the US economy, the largest industrial country in the world, for the release of the Richmond Industrial Index, which may reflect a contraction of the expansion to a value of 12 compared to 18 last August, in conjunction with the disclosure of housing market data with the release of the annual reading of the index. House prices, which may show a slowdown in growth to 2.4% to about 6.05 million homes, compared to 24.7% at 5.86 million homes last July.

This comes before we witness the first half of the semi-annual testimony of Federal Reserve Governor Jerome Powell before the US Congress, specifically before the House Financial Services Committee in Washington on the "CARES" Act, and Powell is expected to testify before the House Select Committee tomorrow. Wednesday, about the economic effects of the Corona pandemic, before he gave the second half of his testimony, tomorrow, Thursday, to the Senate Banking Committee.

We would like to point out that Treasury Secretary Stephen Mnuchin will also deliver his testimony on Thursday, with Powell, about the CARES Act before Congress. The repercussions of the Corona pandemic, with his assertion that there is a need for more fiscal and monetary policy to prevent the health crisis from causing long-term damage to the economy.

Technical analysis

The Australian dollar against the US dollar achieved a strong breakout of 0.7250 and settled below it, which turned the intraday path to the downside, on its way to visit 0.7100 and then 0.6964 levels, as major negative targets.

Thus, the bearish bias will be favored for today, supported by the SMA 50, noting that the expected decline will remain valid unless 0.7325 is breached and stability above it.

The expected trading range for today is between 0.7140 support and 0.7280 resistance.

The expected general trend for today: Bearish.