AUD/USD Daily Forecast – Resistance at 0.7210 In Sight

AUD/USD Video 05.11.20.

Australian Dollar Continues To Gain Ground Against U.S. Dollar

AUD/USD is trying to get to the test of the resistance at 0.7210 while the U.S. dollar continues to lose ground against a broad basket of currencies.

The U.S. Dollar Index has settled below the 20 EMA at 93.45 and is heading towards the next material support level at 93. If the U.S. Dollar Index gets to the test of the 93 level, AUD/USD will have good chances to settle above the resistance at 0.7210.

Today, AUD/USD traders will focus on the upcoming U.S. Fed Interest Rate Decision. The Reserve Bank of Australia made its Interest Rate Decision earlier this week, promising to push yields on 3-year Australian government bonds to 0.1%.

The Fed is expected to leave the rate unchanged so traders will wait for signals of additional easing that may be necessary to support the economy in absence of another round of stimulus from the U.S. government.

Today, U.S. will also provide Initial Jobless Claims and Continuing Jobless Claims reports. Initial Jobless Claims are expected to decline from 751,000 to 732,000 while Continuing Jobless Claims are projected to drop from 7.76 million to 7.2 million.

These reports are especially interesting as yesterday’s ADP Employment Change report was significantly worse than expected, indicating that the recovery of the job market was slowing down.

Technical Analysis

AUD/USD gained strong upside momentum and is trying to get to the test of the nearest resistance level at 0.7210. If AUD/USD settles above this level, it will head towards the next resistance at October highs near 0.7240. A move above 0.7240 will push AUD/USD towards the next resistance level at 0.7275.

On the support side, the previous resistance level at 0.7160 will serve as the first support level for AUD/USD. A move below this level will push AUD/USD towards the next support at the 50 EMA at 0.7135.

If AUD/USD declines below the 50 EMA, it will gain additional downside momentum and move towards the next support level at the 20 EMA at 0.7120.

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