AUD/USD Daily Forecast – Australian Dollar Gains Ground At The Start Of The Week

AUD/USD Video 25.01.21.

Australian Dollar Moves Higher Against U.S. Dollar

AUD/USD is testing the resistance at 0.7740 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is slowly moving towards the nearest support level at 90. In case the U.S. Dollar Index manages to settle below this level, it will head towards the support at 89.75 which will be bullish 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 likely focus on general market sentiment and Biden’s $1.9 trillion stimulus plan.

While some Republicans have already raised concerns about the huge size of the new stimulus package, the stimulus plan is expected to get enough votes which is bullish for riskier assets like Australian dollar.

Oil is rebounding after the recent sell-off and other commodities are also receiving some support from investors which is an additional bullish catalyst for the Australian currency.

Technical Analysis

AUD/USD received support at the 20 EMA at 0.7710 and gained upside momentum. Currently, AUD/USD is trying to settle above the nearest resistance level at 0.7740. RSI is in the moderate territory so there is plenty of room to gain momentum in case the right catalysts emerge.

If AUD/USD settles above the resistance at 0.7740, it will head towards the next resistance level at 0.7760. A successful test of this level will push AUD/USD towards the resistance which is located at 0.7780. If AUD/USD manages to settle above the resistance at 0.7780, it will move towards the next resistance level at 0.7800.

On the support side, the nearest support level for AUD/USD is located at 0.7725. If AUD/USD declines below the support at 0.7725, it will get to the test of the next support at the 20 EMA at 0.7710. A move below the 20 EMA will be a worrisome development for AUD/USD bulls as it will signal that AUD/USD will try to develop additional downside momentum.

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