AUD/USD Daily Forecast – U.S. Dollar Is Under Pressure Amid Stimulus Optimism

AUD/USD Video 29.12.20.

Australian Dollar Gains Some Ground Against U.S. Dollar

AUD/USD is currently trying to get back above the resistance at 0.7600 while the U.S. dollar is under pressure against a broad basket of currencies.

The U.S. Dollar Index has managed to settle near 90.10 and is trying to get to the test of the support at 90. A move below this level will push the U.S. Dollar Index towards yearly lows at 89.75 which will be bullish for AUD/USD.

The American currency is under pressure as traders remain optimistic about chances for a bigger stimulus package. Yesterday, the House of Representatives approved $2,000 stimulus checks. Now, the increased stimulus package will have to be approved by the Republican-controlled Senate.

If the Senate approves bigger stimulus checks, the American currency may find itself under more pressure on the foreign exchange market. At this point, traders are optimistic about the economic recovery in 2021 and continue to support riskier currencies which is bullish for the Australian dollar.

Technical Analysis

AUD/USD is currently testing the nearest resistance level at 0.7600. If this test is successful, AUD/USD will head towards the next resistance level which is located at the recent highs at 0.7635.

Most likely, AUD/USD will need additional catalysts in order to settle above this level. However, the U.S. Dollar Index is not far from its yearly lows, and a move towards this level should push AUD/USD towards new highs.

In case AUD/USD manages to settle above the resistance at 0.7635, it will gain additional upside momentum and move towards the next resistance level at 0.7675. A move above the resistance at 0.7675 will push AUD/USD towards the next resistance at 0.7700.

On the support side, the nearest support level for AUD/USD is located at 0.7575. AUD/USD made an attempt to settle below this level during yesterday’s trading session but failed to gain sufficient downside momentum.

If AUD/USD declines below the support at 0.7575, it will head towards the next support level at the 20 EMA at 0.7540. A move below the 20 EMA will open the way to the test of the support at 0.7500.

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