AUD/USD Daily Forecast – Australian Dollar Is Losing Ground Against U.S. Dollar

AUD/USD Video 22.12.20.

Australian Dollar Is Moving Lower As The Sell-Off In The Commodity Segment Continues

AUD/USD is currently trying to settle below the support at 0.7575 while the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index received support near the 90 level and rebounded closer to 90.30. If the U.S. Dollar Index gains additional upside momentum, it will get to the test of the resistance at 90.50 which will be bearish for AUD/USD.

Today, Australia reported that Retail Sales increased by 7.0% month-over-month in November while analysts expected that Retail Sales would fall by 0.6%. Australia’s Retail Sales remain strong due to the country’s success in virus containment.

The new strain of coronavirus which emerged in the UK is the main catalyst for the foreign exchange market right now. Yesterday, the weakness of the commodities segment put significant pressure on commodity-related currencies like the Australian dollar but they quickly managed to rebound.

However, this rebound did not continue during the current trading session as commodities like oil and copper are under material pressure. If the sell-off in the commodity segment continues, Australian dollar will move lower.

Technical Analysis

AUD/USD managed to get below the support at 0.7575 and is moving towards the next support level at 0.7535. RSI is in the moderate territory so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

In case AUD/USD settles below the support at 0.7535, it will head towards the support at the 20 EMA at 0.7505. A move below the 20 EMA will push AUD/USD towards the support at 0.7485. If AUD/USD declines below this level, it will move towards the next support level at 0.7450.

On the upside, AUD/USD needs to settle above 0.7575 to have a chance to gain upside momentum. The next resistance level is located at 0.7600. This resistance level was tested during yesterday’s trading session and proved its strength. If AUD/USD settles above 0.7600, it will move towards the next resistance at the recent highs at 0.7635.

For a look at all of today’s economic events, check out our economic calendar.