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

AUD/USD Video 05.01.21.

Australian Dollar Moves Higher Against U.S. Dollar

AUD/USD is currently trying to settle above the resistance at 0.7700 while the U.S. dollar is losing some ground against a broad basket of currencies.

The U.S. Dollar Index did not manage to get above the resistance at the 90 level and made an attempt to settle below the nearest support level at 89.75. However, the U.S. Dollar Index failed to develop sufficient downside momentum and continued to trade in the 89.75 – 90 range. If the U.S. Dollar Index manages to settle above the 90 level, it will gain upside momentum and head towards the next resistance at 90.15 which will be bearish for AUD/USD.

Yesterday’s Manufacturing PMI reports from various countries indicated that the rebound in the manufacturing segment continued despite the second wave of the virus. U.S. Manufacturing PMI increased from 56.7 to 57.1 while analysts expected that it would decline to 56.5.

The uncertainty over the results of the Senate elections in Georgia will likely serve as a major catalyst for the American currency on the foreign exchange market today. Some traders may be reluctant to make any major moves before they get a clear picture of the U.S. political landscape.

Technical Analysis

AUD/USD is currently trying to settle above the resistance at 0.7700. RSI declined from recent highs but remains in the overbought territory. However, there is still some room to gain additional upside momentum.

If AUD/USD continues to move higher, it will have to deal with the 0.7730 – 0.7740 resistance area. This resistance area has already been tested several times in recent trading sessions and proved its strength.

In case AUD/USD manages to settle above 0.7740, it will gain additional upside momentum and get to the test of the next resistance at 0.7760.

On the support side, a move below 0.7700 will push AUD/USD towards the next support level at 0.7675. If AUD/USD declines below this level, it will head towards the next support which is located at 0.7635.

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