AUD/USD Daily Forecast – Test Of Support At 0.7860

AUD/USD Video 22.02.21.

Australian Dollar Pulls Back

AUD/USD is currently trying to settle below the support at 0.7860 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index did not manage to settle below the support at 90.30 and remained in the range between 90.30 and the resistance at 90.50. If the U.S. Dollar Index settles above the high end of this range, it will move towards the resistance at the 20 EMA at 90.60 which will be bearish for AUD/USD.

There are no important economic reports scheduled to be released in the U.S. and Australia today so foreign exchange market traders will focus on U.S. government bond yields and commodity price dynamics.

The yields of 30-year U.S. government bonds have recently made an attempt to settle above 2.19%. At the beginning of the month, the 30-year Treasuries yielded just 1.83%. The major increase in bond yields has provided some support to the American currency, but it remains to be seen whether rising yields will push the dollar to higher levels as stimulus hopes and optimism about the speed of the economic recovery continue to put pressure on safe haven assets like the U.S. dollar.

Technical Analysis

AUD/USD is currently trying to settle below the support level which has emerged at 0.7860. If this attempt is successful, AUD/USD will head towards the next support level at 0.7820. No important levels have emerged between 0.7820 and 0.7860 so this move may be fast.

In case AUD/USD declines below 0.7820, it will head towards the next support at 0.7800. If AUD/USD settles below this level, it will get to the test of the support at 0.7780.

On the upside, the nearest resistance level for AUD/USD is located at 0.7875. If AUD/USD manages to settle above this level, it will head towards the next resistance at 0.7890. A move above the resistance at 0.7890 will open the way to the test of the resistance which is located at the recent highs at 0.7910.

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