AUD/USD Daily Forecast – Test Of Support At 0.7150

AUD/USD Video 14.10.20.

U.S. Dollar Tries To Gain More Ground Against Australian Dollar

AUD/USD has recently made an attempt to settle below 0.7150 as the U.S. dollar continued to gain ground against a broad basket of currencies.

The U.S. Dollar Index gained significant upside momentum and is heading towards the 50 EMA at 93.75. If the U.S. Dollar Index manages to settle above this level, it will move towards 94.00 which will be bearish for AUD/USD.

Today, Australia reported that Consumer Confidence Index increased from 93.8 in September to 105 in October. This major improvement in Consumer Confidence is likely due to Australia’s relative success in containing the coronavirus pandemic.

In the U.S., Senate Majority Leader Mitch McConnell stated that the Senate would vote on a $500 billion coronavirus aid package bill next week. Meanwhile, Democrats remain focused on their own $2.2 trillion aid package proposal.

It remains to be seen whether Democrats and Republicans will be able to reach any consensus before the election in November. Meanwhile, the recent upside move of the U.S. dollar highlighted the increased demand for safe haven assets. If this trend continues, AUD/USD will find itself under additional pressure.

Technical Analysis

AUD/USD has managed to get below the 50 EMA at 0.7180 and is trying to move below the nearest support level at 0.7150. If this attempt is successful, AUD/USD will gain additional downside momentum and decline towards the next support level at 0.7130.

A move below the support at 0.7130 will push AUD/USD towards the next support level at October lows at 0.7100. Most likely, AUD/USD will need additional downside catalysts to settle below the support at 0.7100.

On the upside, the nearest resistance level is located at the 50 EMA at 0.7180. The 20 EMA is located at the same level so this resistance level is set to be a material obstacle on the way up for AUD/USD.

If AUD/USD gets above the resistance at 0.7180, it will gain upside momentum and head towards the next resistance level at 0.7210. A move above 0.7210 will open the way to the test of the resistance at the recent highs at 0.7240.

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