AUD/USD Daily Forecast – U.S. Dollar Starts The Week On A Strong Note

AUD/USD Video 11.01.21.

U.S. Dollar Gains Ground Against Australian Dollar At The Beginning Of The Week

AUD/USD is currently testing the nearest support level at 0.7700 while the U.S. dollar continues to rebound against a broad basket of currencies.

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The U.S. Dollar Index gained upside momentum and is trying to get to the test of the resistance at 90.50. If the U.S. Dollar Index manages to settle above this level, it will head towards the next resistance at 90.70 which will be bearish for AUD/USD.

Today, Australia reported that Retail Sales increased by 7.1% in November after growing by 1.4% in October. Analysts expected that Retail Sales would grow by 7.0%. Australias success in its battle against coronavirus provided material support to Retail Sales.

The main risk for the Australian economy is presented by the recent developments in China which had to impose strict anti-virus measures in the Hebei province in order to deal with a coronavirus outbreak.

If the virus spreads to other regions of China, commodity markets will find themselves under pressure which will serve as a negative catalyst for commodity-related currencies like the Australian dollar. In this light, foreign exchange market traders will have to closely monitor the situation in China.

[fx-article-ad]Technical Analysis

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AUD/USD has recently made an attempt to settle below the nearest support level at 0.7700. If AUD/USD declines below this level, it will head towards the next support at 0.7675.

The 20 EMA is located at 0.7665 so AUD/USD will likely receive material support in the 0.7665 – 0.7675 area. A move below the 20 EMA will push AUD/USD towards the next support level at 0.7635.

On the upside, the previous support level at 0.7740 will likely serve as the first resistance level for AUD/USD. RSI has entered into the moderate territory after the recent pullback so there is plenty of room to gain upside momentum.

In case AUD/USD manages to settle above this level, it will head towards the next resistance at 0.7760. A move above this level will push AUD/USD towards the resistance at 0.7800.

For a look at all of todays economic events, check out our economic calendar.