AUDUSD consolidates around 0.73 as the pair has lost the strong momentum after the Fed decision and statement the previous week that helped USD to rebound from almost two-year lows. Fed revised its projections for the U.S. economy upward, now it expects the U.S. economy to shrink by 3.7% in 2020 below the previous forecast of a 6.5% contraction while the unemployment is expected at 7.6%.
Australian economy showed some signs of improvement the last week while the new coronavirus infections are slowing down. The Australian Unemployment Rate came in at 6.8% in August, well below the expectations of 7.7%. Also, the Westpac Consumer Confidence in September came in at 93.8 from 79.5 in August. The housing market also rebounds as a new relief package has announced by Victoria State up to 1.1 billion for small and medium businesses.
China’s Economic Recovery Would Support AUD
The People’sPeople’s Bank of China (PBOC) kept the one year and five-year loan prime rates unchanged at 3.85% and 4.65% respectively while it continues to support the economy as it injected 210 billion yuan into the markets through open market operations the last week. Chinese President Xi Jinping positive comments on the Chinese economy might help Aussie dollar, as China is Australia’sAustralia’s main trade partner.
AUDUSD Daily Technical Analysis
AUDUSD adds 0.35% at 0.7317 in early European trading and returns above the 0.73 mark keeping the rebound from the recent lows alive. The Aussie dollar has gained over 18% since the March lows, while it is 4.33% higher against the greenback in 2020.
Resistance for the pair stands at 0.7351 the high from September 16. The next strong support is at 0.7415 the two-year highs from September 1. On the other hand support for AUDUSD is at 0.7252 the low from September 17. The 50-day moving average at 0.7197 would provide firm support. If the bears break that support, then we might see a sharp correction towards 0.6983.