AUDUSD analysis 02.11.2020

The Australian dollar fluctuated in a narrow range that tends to decline during the Asian session, to witness its lowest since July 20 against the US dollar, following the developments and economic data that they followed on the Australian economy and on the cusp of economic developments and data expected today, Monday, by the US economy, the largest economy in the world. In the shadow of market pricing of the second wave of the Coronavirus outbreak.

At exactly 04:25 AM GMT, the Australian dollar against the US dollar fell 0.26% to 0.7014 levels compared to opening levels at 0.7032, after the pair achieved its lowest level in four months at 0.6997, while it achieved its highest during the session at 0.7033, Knowing that the pair started trading on a rising gap after ending last week’s trading at 0.7028 levels.

We followed up on the Australian economy the release of the manufacturing index reading by the Australian Industrial Group (AIG), which showed an expansion at a value of 56.3 compared to a contraction of 46.7 in the previous reading for the month of September, and we would like to indicate that the reading is at a value of 50 or Higher reflects the widening of the sector, while its issuance of less than 50 reflects the sector's contraction.

This came before we witness the disclosure of housing market data, with the release of the construction permits reading, which showed a 15.4% increase compared to a 2.3% decline last August, contrary to expectations for a 1.5% rise, while the annual reading of the same index showed an acceleration of growth to 8.8% compared to 0.6. This coincided with the release of the home loan index, which reflected a slowdown in growth to 6.0%, compared to 13.6% in August.

This also came in conjunction with the Melbourne Institute (MI) disclosure of the inflation gauge reading, which showed a contraction of 0.1% versus 0.1% in September, while the annual reading of the same index showed slowing growth to 1.1% from 1.3%, and the release of the announcements index reading. Employment, which showed an acceleration of growth to 9.4%, compared to 8.3% in September.

On the other hand, the markets are looking to unveil the final reading of the manufacturing PMI by Markit from the United States, which may reflect the stability of the expansion at a value of 53.3, unchanged from the initial reading for the past month and compared to 53.2 in September, before we witnessed before. The US economy released its construction spending index reading, which shows growth slowing to 1.0%, compared to 1.4% in August.

This comes in conjunction with the disclosure by the largest industrialized country in the world of a reading of the Industrial Supply Institute index, which may show an expansion to a value of 55.6 compared to 55.4 in the previous reading for the month of September, while the reading of the same index measured by prices may indicate that the expansion has decreased to a value of 60.5 compared to 62.8 In September, otherwise, markets are looking forward to tomorrow's US presidential election actions in the US.

Technical analysis

The Australian dollar against the US dollar shows further decline, to gradually creep towards our second awaited target at 0.6964, supported by the negative pressure that the MA 50 represents, awaiting a further decline in the upcoming sessions.

The descending channel that appears in the image supports the chances of surpassing the aforementioned target and achieving more negative targets in the longer term, while the expected decline will remain intact unless the price pushes to breach 0.7140 and stabilize above it.

The expected trading range for today is between 0.6940 support and 0.7060 resistance

The expected general trend for today: Bearish