AUD/USD Daily Forecast – Support At 0.7600 Stays Strong

AUD/USD Video 02.02.21.

Australian Dollar Is Mostly Flat Against U.S. Dollar

AUD/USD has recently made another attempt to settle below 0.7600 while the U.S. dollar remained flat against a broad basket of currencies.

The U.S. Dollar Index continues its attempts to settle above the 91 level. The U.S. Dollar Index will have to get above the resistance at 91.10 in order to develop additional upside momentum. In this case, the U.S. Dollar Index will move towards 91.50 which will be bearish for AUD/USD.

Today, the Reserve Bank of Australia left the interest rate unchanged at 0.1%. The Bank has also decided to purchase an additional $100 billion of bonds issued by the country’s government, states and territories after the completion of the current asset purchase program in mid-April.

The Bank stated that these additional purchases will be made at the current rate of $5 billion per week, so RBA has extended the program by 20 weeks.

RBA also noted that Australia’s economic recovery was stronger than expected and that it projected that the country’s GDP would grow by 3.5% in both 2021 and 2022.

While the extension of the asset purchase program has put the Australian dollar under some pressure on the foreign exchange market, it remains to be seen whether AUD/USD will be able to gain additional downside momentum as the U.S. Fed remains ultra-dovish.

Technical Analysis

AUD/USD has made another attempt to settle below the support level which has recently emerged at 0.7600 but failed to develop sufficient downside momentum and rebounded above the 50 EMA at 0.7620.

The next resistance level for AUD/USD is located at 0.7635. If AUD/USD manages to settle above this level, it will move towards the next resistance at the 20 EMA at 0.7675 although it may also face some resistance near 0.7660.

On the support side, a move below the 50 EMA will push AUD/USD towards the support at 0.7600. In case AUD/USD settles below 0.7600, it will head towards the next support level at 0.7575. A successful test of this level will open the way to the test of the next support at 0.7540.

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