AUD/USD Daily Forecast – Australian Dollar Starts The Week On A Strong Note

AUD/USD Video 28.12.20.

Australian Dollar Gains Ground Against U.S. Dollar At The Start Of The Week

AUD/USD managed to get above the resistance at 0.7600 and is heading towards the next resistance at 0.7635 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is slowly moving towards the nearest support level at 90. If the U.S. Dollar Index settles below this level, it will head towards the next support at 89.75 which will be bullish for AUD/USD.

Riskier assets got a boost after U.S. President Donald Trump signed the coronavirus aid and spending package on Sunday. It remains to be seen whether additional stimulus will be sufficient enough to push the U.S. dollar to new lows as the move may have been already priced in by foreign exchange market traders.

There are no important economic reports scheduled to be released in the U.S. and Australia today so the trading dynamics of AUD/USD will be determined by general risk sentiment and the dynamics of commodity markets.

Technical Analysis

AUD/USD is currently trying to get to the test of the nearest resistance level at 0.7635. RSI has entered into the overbought territory but it remains below December highs so there is some room to gain additional upside momentum in case the right catalysts emerge.

If AUD/USD manages to settle above the resistance at 0.7635, it will head towards the next resistance level at 0.7675. A successful test of the resistance at 0.7675 will open the way to the test of the next resistance at 0.7700.

On the support side, the previous resistance level at 0.7600 will likely serve as the first support level for AUD/USD. In case AUD/USD settles below this level, it will move towards the next support at 0.7575.

A move below the support at 0.7575 will push AUD/USD towards the next support which is located at the 20 EMA at 0.7535. The 20 EMA will likely serve as a major support level for AUD/USD, and a move below this level will present a serious problem for AUD/USD bulls.

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