AUD/USD Daily Forecast – Support At 0.7100 In Sight

AUD/USD Video 26.10.20.

Australian Dollar Is Under Pressure At The Beginning Of The Week

AUD/USD is pulling back after the recent upside move as the U.S. dollar continues to gain ground against a broad basket of currencies.

The U.S. Dollar Index is currently testing the nearest resistance level at 93.00. A move above this level will open the way to the test of the next resistance at the 20 EMA at 93.25. In case the U.S. Dollar Index manages to settle above the 20 EMA, it will gain additional upside momentum and head towards the 50 EMA at 93.60 which will be bearish for AUD/USD.

Today, AUD/USD traders will continue to follow the news about U.S. stimulus package negotiations. While U.S. House Speaker Nancy Pelosi has recently stated that negotiations continued and she expected a White House response on Monday, it remains to be seen whether U.S. lawmakers would be able to reach a compromise deal before November elections.

In addition, AUD/USD traders will have a chance to take a look at U.S. New Home Sales data for September which will be released today. Analysts expect that New Home Sales will grow by 2.8% month-over-month compared to growth of 4.8% in August. The U.S. housing segment has shown its strength during the current crisis so the report may deliver a positive surprise.

Technical Analysis

AUD/USD failed to settle above the nearest resistance level at the 20 EMA at 0.7130 and is moving towards the support at 0.7100. In case AUD/USD manages to settle below the support at 0.7100, it will gain additional downside momentum and head towards the next support level at 0.7075.

A move below the support at 0.7075 will open the way to the test of the next support at October lows at 0.7030.

On the upside, AUD/USD needs to settle above the resistance at the 20 EMA to have a chance to develop additional upside momentum. In case AUD/USD gets above the 20 EMA, it will head towards the next resistance level at the 50 EMA at 0.7150.

A move above the resistance at the 50 EMA will push AUD/USD towards the next resistance at 0.7180.

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