AUD/USD Daily Forecast – Australian Dollar Rebounds On U.S. Stimulus Hopes
AUD/USD Video 21.10.20.
U.S. Dollar Loses Ground Against Australian Dollar
AUD/USD is trying to settle above the nearest resistance level at 0.7075 as the U.S. dollar is losing ground against a broad basket of currencies.
The U.S. Dollar Index gained strong downside momentum amid hopes for a new U.S. stimulus package. Negotiations between Republicans and Democrats continue, and the market believes that they will be able to reach a compromise deal by the end of the week.
This optimism puts pressure on safe haven assets like the U.S. dollar. The U.S. Dollar Index has just managed to get below the nearest support level at 92.80 and is moving towards the next support at 92.50.
If the U.S. Dollar Index settles below the support at 92.50, it will head towards the next support at 92.15 which will be bullish for AUD/USD.
Today, Australia reported that Westpac Leading Index increased by 0.2% month-over-month in September, suggesting that the recovery of the Australian economy continued.
Australia has been successful in containing the coronavirus pandemic compared to other developed economies so it’s not surprising that its economy continues to rebound after the blow dealt by the virus.
AUD/USD gained upside momentum and is trying to settle above the resistance at 0.7075. If this attempt is successful, AUD/USD will move towards the test of the next resistance level at 0.7100.
This resistance level has been tested during the recent trading sessions and proved its strength. In case AUD/USD manages to settle above 0.7100, it will gain upside momentum and head towards the next resistance at the 20 EMA at 0.7130.
A move above the resistance at the 20 EMA will push AUD/USD towards the next resistance near the 50 EMA at 0.7150.
On the support side, a move below 0.7075 will open the way to the test of the next support level at the recent lows at 0.7030. If AUD/USD manages to get below the support at 0.7030, it will gain additional downside momentum and head towards the next support at September lows near 0.7000.
For a look at all of today’s economic events, check out our economic calendar.