AUD/USD Daily Forecast – Australian Dollar Rebounds After Sell-Off

AUD/USD Video 23.12.20.

U.S. Dollar Is Under Pressure Against Australian Dollar

AUD/USD  is trying to settle above the resistance level at 0.7575 while the U.S. dollar is under pressure against a broad basket of currencies.

The U.S. Dollar Index is slowly moving towards the nearest material support level at 90. If the U.S. Dollar Index gets to the test of this level, AUD/USD will receive additional support.

While trading is usually quiet on the foreign exchange market during pre-Christmas days, this is not the case today as traders have to deal with a surprising twist in the U.S. stimulus story.

U.S. President Donald Trump declared that he wanted to raise stimulus checks from $600 to $2,000 per person. At this point, it is not clear if he is ready to veto the bill which is the result of challenging negotiations between Republicans and Democrats.

Interestingly, this development did not provide support for the safe-haven U.S. dollar, and traders favored riskier assets despite stimulus uncertainty and the new COVID-19 strain.

Technical Analysis

AUD/USD failed to settle below the nearest support level at 0.7535 and is trying to get back above the resistance at 0.7575. If AUD/USD manages to settle above 0.7575, it will gain upside momentum and head towards the next resistance level at 0.7600. A move above 0.7600 will push AUD/USD towards the resistance at the recent highs at 0.7635.

On the support side, the nearest support level for AUD/USD is still located at 0.7535. AUD/USD has already made several attempts to settle below this level in recent trading sessions but failed to gain sufficient downside momentum. A this point, it looks like the support at 0.7535 is strong, and AUD/USD will need additional catalysts to get below this level.

If AUD/USD declines below the support at 0.7535, it will head towards the next support at the 20 EMA at 0.7510. A successful test of this support level will open the way to the test of the next support at 0.7485.

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