AUD/USD Daily Forecast – Resistance At 0.7740 In Sight

AUD/USD Video 12.01.21.

Australian Dollar Rebounds After Yesterday’s Sell-Off

AUD/USD is currently trying to get to the test of the nearest resistance level at 0.7740 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index managed to get below the support at 90.50 but did not develop significant downside momentum. If the U.S. Dollar Index gains downside momentum and gets to the test of the next support level at the 20 EMA at 90.25, AUD/USD will get a boost.

Today, commodity markets rebound after yesterday’s sell-off which was triggered by fears about the potential second wave of the virus in China. This rebound serves as a bullish catalyst for commodity-related currencies including Australian dollar.

Still, foreign exchange market traders will have to closely monitor the situation in China as the Australian dollar may find itself under material pressure in case the country loses control of the virus and markets’ focus shifts back to the pandemic.

Technical Analysis

AUD/USD failed to settle below 0.7700 and is trying to get to the test of the nearest ressitance level at 0.7740. RSI is in the moderate territory so there is plenty of room to gain upside momentum in case the right catalysts emerge.

If AUD/USD settles above the resistance at 0.7740, it will gain additional upside momentum and head towards the next resistance level at 0.7760. A successful test of this level will push AUD/USD towards the next resistance level at 0.7800.

On the support side, the nearest support level for AUD/USD is located at 0.7700. In case AUD/USD declines below this level, it will head towards the next support at 0.7675. The 20 EMA is located in the nearby, and AUD/USD will likely receive material support at this level.

A move below the 20 EMA will signal that AUD/USD lost upside momentum and is ready to move lower. In this case, AUD/USD will move towards the next support level which is located at 0.7635.

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