AUD/USD Daily Forecast – Resistance At 0.7635 In Sight

AUD/USD Video 17.12.20.

Australian Dollar Continues To Move Higher Against U.S. Dollar

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

The U.S. Dollar Index managed to get below the key support level at 90 and is trying to develop additional downside momentum. The next support level for the U.S. Dollar Index is located at 89.40, and a move below this level will provide additional support to AUD/USD.

Yesterday, the U.S. Fed left the interest rate unchanged and promised to keep buying at least $120 billion of bonds per month until the economy gets to the target inflation and employment rates. Many traders believed that the Fed will specifically target longer-dated bonds in order to put pressure on their yields but it did not announce such a move.

Meanwhile, U.S. lawmakers are moving closer to a compromise deal on the new coronavirus aid package. According to recent reports, the $900 billion package will include $600-$700 stimulus checks and extended unemployment benefits.

Today, Australia reported that Unemployment Rate declined from 7% in October to 6.8% in November while analysts expected that it would remain unchanged at 7%. Australian economy continues to show strength thanks to the country’s success in virus containment.

Technical Analysis

AUD/USD is currently trying to get to the test of the nearest resistance level at 0.7635. RSI is close to the extremely overbought territory so the risks of a pullback are significant.

If AUD/USD manages to settle above the resistance at 0.7635, it will head towards the next resistance at 0.7655. A move above 0.7655 will push AUD/USD towards the resistance level at 0.7680.

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 declines below this support level, it will gain downside momentum and head towards the next support level at 0.7575. A successful test of this level will open the way to the test of the support at 0.7535.

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