AUDUSD analysis 25.09.2020

The Australian dollar fluctuated in a narrow range slanting to an upward trend during the Asian session, to witness its rebound for the second session from its lowest since July 21 against the US dollar amid scarcity of economic data in the last sessions of the week by the Australian economy and on the cusp of economic developments and data expected today, Friday before. The American economy is the largest in the world.

 At 03:29 GMT, the Australian dollar against the US dollar rose 0.11% to 0.7055 levels compared to opening levels at 0.7047, after the pair achieved its highest level during the session's trading at 0.7062, while the pair achieved its lowest level at 0.7044.

 Investors are currently awaiting the US economy to unveil the durable goods orders index, which represents about half of consumer spending, which accounts for more than two-thirds of GDP in the United States, and which may reflect a slowdown in the pace of growth to 1.1% compared to 11.4% last July. The core reading of the same index may also show a slowdown in the pace of growth to 1.0%, compared to 2.6% in July.

 Later today, markets are looking forward to a speech by the President of the New York Federal Reserve and a member of the Federal Open Market Committee, John Williams, about the labor market in light of the Corona pandemic at a webinar hosted by the University of Rochester, and this comes hours after the expiration of the semi-annual testimony of Federal Reserve Governor Jerome in front of The US Congress has both the House Financial Services Committee and the Senate Banking Committee.

 Powell stated that about $ 195 billion was provided in the Aid, Relief and Economic Security Bill in the face of the repercussions of the "CARES Act" in order to confront the negative repercussions of the Corona pandemic so far, while expressing that small and medium companies need more support for a longer period than He postponed its return to what it was before the health crisis, and touched on the fact that the Federal Reserve continues to support the economy in these unprecedented situations.

 Powell noted that the Federal Reserve did not provide any loans to large companies directly, while stating that he does not agree with the raising of local state governments taxes during the current period and that the Fed will continue with the wage protection program if it obtains congressional approval, amid his refusal to comment on talks The poles of US policy, the Republican Party and the Democratic Party, about the second anticipated stimulus package in the markets.

 In the same context, Powell stressed that failure to approve more stimulus will significantly harm companies and families, especially in light of the continuing downside risks to the American economy, explaining that he believes that Congress should use $ 130 billion to support the wage protection program, with reference to the availability of a vaccine. Corona will enhance the state of certainty in the markets and among families and companies.

In another context, Powell noted that the Federal Reserve's maintenance of short-term reference interest rates is zero aimed at supporting economic activity and strengthening inflationary pressures towards the 2% target, and that achieving this will push it to raise interest on federal funds later, adding that in the short term, the interest rate on funds will not be zero. Federalism is good for people, but citizens will feel the importance of low interest in the medium and long term.

Technical analysis

The Australian dollar versus the US dollar approached the 0.7000 barrier yesterday, and some slight bullish bias appears now affected by the positivity of the stochastic indicator, which is losing its positive momentum significantly, waiting to stimulate the price to resume the expected downside trend for the coming period, whose next main target is at 0.6964.

From here, the bearish trend scenario will remain valid for the upcoming period, unless the price rallies to breach 0.7190 and stabilize above it.

The expected trading range for today is between 0.6980 support and 0.7100 resistance.

The expected general trend for today: Bearish.