AUD/USD Daily Forecast – Test Of Resistance At 0.7450

AUD/USD Video 09.12.20.

Australian Dollar Gains Ground Against U.S. Dollar

AUD/USD is testing the nearest resistance level at 0.7450 while the U.S. dollar is under pressure against a broad basket of currencies.

The U.S. Dollar Index did not manage to get above the nearest resistance at 91 and pulled back closer to 90.80. It has recently made an attempt to get below 90.70 but failed to develop sufficient downside momentum. If the U.S. Dollar Index declines below 90.70, it will head towards yearly lows at 90.50 which will be bullish for AUD/USD.

Today, Australia reported that Building Permits increased by 3.8% month-over-month in October after growing by 16.2% in September. Meanwhile, Consumer Confidence Index increased from 107.7 in November to 112 in December. Australia’s economy continues to rebound thanks to the country’s success in containing the spread of the virus.

In the U.S., the Trump administration has recently proposed a new $916 billion coronavirus aid package. Negotiations between Republicans and Democrats continue, and it looks like they are moving closer to a compromise deal. This is good news for the U.S. economy which has started to slow down due to the negative impact of the second wave of the virus.

At the same time, it remains to be seen whether the new stimulus package will put additional pressure on the dollar on the foreign exchange market.

Technical Analysis

AUD/USD is currently trying to settle above the nearest resistance level at 0.7450. If this attempt is successful, AUD/USD will gain additional upside momentum and head towards the next resistance level at 0.7465.

RSI is close to the overbought territory but there is still some room to gain momentum in case the right catalysts emerge. A move above the resistance at 0.7465 will push AUD/USD towards the next resistance level at 0.7485.

On the support side, the nearest support level for AUD/USD is located at 0.7415. If AUD/USD declines below this level, it will get to the test of the next support at 0.7400. A move below the support at 0.7400 will open the way to the support at 0.7380.

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