AUDUSD in focus
Gary Christie August 31, 2020 2:21 PM
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
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.