AUDUSD in focus
Gary Christie August 31, 2020 9:21 AM
Significant breakout in play...will the pair hold?
Here is a review of the last 5 days of U.S. economic data.
Personal Income unexpectedly rose 0.4% on month in July (-0.2% expected), compared to a revised -1.0% in June. Personal Spending increased 1.9% on month in July (+1.6% expected), compared to a revised +6.2% in June.
The University of Michigan's Consumer Sentiment Index increased to 74.1 on month in the August final reading (72.8 expected), from 72.8 in the August preliminary reading.
U.S. GDP rose to -31.7% on quarter in the second quarter second reading (-32.5% expected), from -32.9% in the second quarter advanced reading.
Initial Jobless Claims decreased to 1,006K for the week ending August 22nd (1,000K expected), from a revised 1,104K in the previous week. Continuing Claims fell to 14,535K for the week ending August 15th (14,400K expected), from a revised 14,758K a week earlier.
Regarding Homes, Pending Home Sales rose 5.9% on month in July (+2.0% expected), compared to +15.8% in June. The Mortgage Bankers Association's Mortgage Applications fell 6.5% for the week ending August 21st, compared to -3.3% in the week before. New Home Sales jumped to 901K on month in July (790K expected), from a revised 791K in June.
Fed Chair J. Powell spoke at the Jackson Hole Economic Policy Symposium where he outlined the Fed's newly revised consensus statement. Firstly, the Fed removed its maximum employment target and instead aims for maximum employment as a broad based goal. Secondly, the Fed seeks to achieve inflation that averages 2%, rather than a 2% target. Although the changes are subtle, it shows the severe impact of the coronavirus on a US economy that was already slowing prior to pandemic.
On Monday, no major economic data is expected to be released.
The Australian dollar was up over 2.75% against the greenback last week. A significant breakout has been confirmed in the AUDUSD pair. Price action broke above a long term declining trend line in place since 2015. We anticipate the upside momentum to continue towards 2018 highs around the 0.813 level. A break below support at 0.6985 may put the pair back into a bearish trend.
Source: GAIN Capital, TradingView
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