AUD/USD Daily Forecast – U.S. Dollar Gains Ground Against Australian Dollar

AUD/USD Video 02.03.21.

Australian Dollar Is Moving Lower Against U.S. Dollar

AUD/USD is currently trying to settle below the support at 0.7735 while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index is testing the resistance level at 91.30. If this test is successful, the U.S. Dollar Index will head towards the next resistance level at 91.50 which will put additional pressure on AUD/USD.

Today, the Reserve Bank of Australia announced its interest rate decision and left the rate unchanged at 0.1%. The Bank stated that the outlook improved in recent months thanks to the rollout of vaccines.

The Bank added that wage and price pressures remained subdued and that it expected inflation of 1.25% in 2021, followed by inflation of 1.5% in 2022. The Reserve Bank of Australia reiterated that it remained committed to its yield targets and that it would continue to purchase bonds in the quantity that is sufficient enough to keep yields low.

Foreign exchange market traders will also continue to monitor the developments in the U.S. government bond market. Treasury yields have declined from recent highs but the U.S. dollar continues to enjoy support from traders.

Technical Analysis

AUD/USD is currently testing the nearest support level at 0.7735. If this test is successful, AUD/USD will move towards the next support which is located at the 20 EMA at 0.7720.

If AUD/USD declines below the support at 0.7720, it will head towards the next support level at 0.7700. A move below the support at 0.7700 will open the way to the test of the support at 0.7665. No important levels have emerged between 0.7665 and 0.7700 so this move may be fast.

On the upside, the nearest resistance level for AUD/USD is located at 0.7760. If AUD/USD manages to settle above this level, it will head towards the next resistance at the 20 EMA at 0.7785. In case AUD/USD gets above the 20 EMA, it will head towards the resistance at 0.7800.

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