AUD/USD Daily Forecast – Test Of Support At 0.7535

AUD/USD Video 21.12.20.

Australian Dollar Is Losing Ground Against U.S. Dollar

AUD/USD is under serious pressure at the beginning of the week while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index gained strong upside momentum and is testing the resistance at 90.50. The main reason for the recent strength of the American currency is the new COVID-19 strain in Britain which forced many European countries to close their borders for British travelers.

Commodity-related currencies like Australian dollar are under serious pressure today due to the new strain.

U.S. lawmakers have finally managed to reach compromise on the new $900 billion coronavirus aid package, and the House of Representatives will likely vote on this package on Monday.

However, the disruption brought by the new COVID-19 strain has completely overshadowed the positive developments on the stimulus front. In addition, shorting the dollar was a crowded trade so many traders rushed for exits at the same time.

It remains to be seen whether the current rebound of the U.S. dollar will be sustainable as bearish fundamentals, which include the dovish Fed and the new round of stimulus, may soon prevail.

Technical Analysis

AUD/USD is currently trying to settle below the support level at 0.7535. If this attempt is successful, AUD/USD will head towards the next support at 0.7500.

A move below 0.7500 will push AUD/USD towards the next support level at 0.7485. In case AUD/USD declines below the support at 0.7485, it will head towards the support at 0.7450.

On the upside, AUD/USD needs to stay above the support at 0.7535 to have a chance to develop upside momentum in the near term. The nearest resistance level for AUD/USD is located at 0.7575.

If AUD/USD gets above this level, it will head towards the next resistance level at 0.7600. A move above the resistance at 0.7600 will open the way to the resistance which is located at the recent highs at 0.7635.

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