AUD/USD Daily Forecast – Test Of Support At 0.7725

AUD/USD Video 22.01.21.

Australian Dollar Pulls Back Ahead Of The Weekend

AUD/USD is currently trying to settle below the support level at 0.7725 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index received material support near the 90 level and is moving towards the resistance at the 20 EMA at 90.30. If the U.S. Dollar Index manages to settle above this level, it will head towards 90.50 which will be bearish for AUD/USD.

Today, Australia provided flash PMI reports for January. Manufacturing PMI increased from 55.7 in December to 57.2 in January while Services PMI declined from 57.0 to 55.8. Meanwhile, preliminary Retail Sales data for December indicated that Retail Sales declined by 4.2% month-over-month compared to analyst consensus which called for a decline of 2.5%.

Foreign exchange market traders will also have a chance to evaluate PMI data from the U.S. which will be published today. U.S. Manufacturing PMI is expected to decline from 57.1 to 56.5 while U.S. Services PMI is projected to decrease from 54.8 to 53.6.

Technical Analysis

AUD/USD managed to get below the support level at 0.7740 and is currently testing the next support level at 0.7725. If this test is successful, AUD/USD will move towards the next support which is located at the 20 EMA near 0.7710.

If AUD/USD declines below the 20 EMA, it will gain additional downside momentum and head towards the support level at 0.7675. A successful test of the support at 0.7675 will open the way to the test of the next support which is located at the recent lows at 0.7660.

On the upside, the previous support level at 0.7740 will likely serve as the first resistance level for AUD/USD. If AUD/USD manages to settle above the resistance at 0.7740, it will move towards the next resistance at 0.7760.

A move above this level will push AUD/USD towards the next resistance level at 0.7780. In case AUD/USD gets above the resistance at 0.7780, it will move towards the resistance level at 0.7800.

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