AUDUSD analysis 06.11.2020

The Australian dollar fluctuated in a narrow range that tends to decline during the Asian session, to witness its retracement of the second session from its highest since September 21, while it is still in the process of its best weekly performance since the beginning of this year against the US dollar after the developments and the economic data that followed it on the Australian economy And on the cusp of economic developments and data expected on Friday by the US economy, the largest economy in the world.

At exactly 03:40 am GMT, the Australian dollar against the US dollar fell 0.29% to 0.7262 levels compared to opening levels at 0.7283, after the pair achieved its lowest level during the session's trading at 0.7250, while achieving its highest at 0.7284.

We have followed up on the Australian economy the release of the services index reading by the Australian Industrial Group (AIG), which reflected an expansion of 51.4 compared to a contraction of 36.2 last September. This came before we witnessed the Reserve Bank of Australia unveiling the monetary policy statement for the meeting that took place. Last Tuesday, during which it was approved to cut interest rates by 15 basis points to 0.10%, which was in line with expectations at the time.

The statement stated that the Central Bank of Australia that the Corona pandemic will have "long-term effects" on the Australian economy and that the gross domestic product is "unlikely" to return to the level it was before the pandemic until the end of next year 2021, explaining that "in general, from The economy is expected to be significantly smaller at the end of the forecast period than was projected before the pandemic, in part due to the sharp slowdown in population growth.

The Australian Central Bank’s statement also stated that it is not considering lowering interest rates, but rather focuses on buying bonds, with reference to the fact that the Australian economy will grow 6% in the twelve months that end at the end of June 2021 and will grow 4% in the fiscal year that ends in June 2022 And it is also expected that employment growth will slow in the next few months, while the core inflation rate is heading to the "lowest level" below 1% during 2021.

We would like to point out that monetary policymakers at the Reserve Bank of Australia approved at the November 3 meeting to increase the volume of purchases of government bonds by 100 billion Australian dollars for a period of six months and to buy government bonds with a maturity of five and ten years, while maintaining the target of yielding bonds. Three-year maturities at 0.10%, in addition to their approval of reducing the lead on credit facility loans to 0.10%.

On the other hand, investors are currently awaiting the US economy to disclose labor market data, with the release of the employment change index reading for the sectors other than agricultural, which may reflect 595 thousand jobs added compared to 661 thousand jobs added last September, while the average index reading may indicate Hourly income growth accelerated to 0.2% from 0.1%. This is with the unemployment rate reading showing a decline to 7.7% from 7.9% in September.

This comes, before we witness the release of the final reading of the wholesale inventories index, which may confirm a decline of 0.1%, unchanged from the previous initial reading for the month of September and compared to a rise of 0.4% last August, leading to the disclosure of the reading of the consumer credit index, which may Reflects an increase to $ 7.9 billion compared to a decline of $ 7.2 billion in August.

In another context, we have just watched the end of the November 4-5 FOMC meeting via satellite in Washington, during which the Fed’s monetary policymakers decided to maintain the short-term reference interest rates for the sixth consecutive meeting at Its lowest level was between zero and 0.25%, which was in line with expectations.

Yesterday, we also followed the press conference held by Federal Reserve Governor Jerome Powell, half an hour after the end of the meeting, to comment on the decisions and directions of the committee, in which he expressed the importance of the fiscal stimulus policy to support the economy amid his emphasis on the Federal Reserve's commitment to using all its tools to support the recovery.

Technical analysis

The Australian dollar against the US dollar traded on a positive note, approaching the 0.7300 barrier, which strengthens expectations for the continuation of the bullish trend during the upcoming sessions, reminding you that our targets start at 0.7325 and extend to 0.7413.

The SMA 50 continues to support the suggested bullish wave, which will remain valid as long as the price maintains its stability above 0.7120.

The expected trading range for today is between 0.7200 support and 0.7360 resistance

The expected general trend for today: Bullish