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AUD/USD Daily Forecast – Australian Dollar Is Under Pressure

Vladimir Zernov
·2-min read

AUD/USD Video 26.01.21.

U.S. Dollar Gains Ground Against Australian Dollar

AUD/USD is currently trying to settle below the support at 0.7675 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get above the resistance at 90.50 and is trying to develop additional upside momentum. The next resistance level for the U.S. Dollar Index is located at 90.70. If the U.S. Dollar Index settles above this level, it will head towards the 50 EMA at 90.80 which will be bearish for AUD/USD.

The U.S. dollar gained upside momentum amid doubts about the size of the new U.S. stimulus package. Biden’s $1.9 trillion stimulus proposal is facing opposition from Republicans who want a more targeted package, and U.S. Senate Majority Leader Chuck Schumer has already indicated that Democrats will try to pass the bill with a majority vote.

Meanwhile, commodity-related currencies like Australian dollar or Canadian dollar are under pressure on the foreign exchange market amid worries about the continued spread of coronavirus. If the current downside move in the commodity space turns into a real sell-off, Australian dollar will find itself under additional pressure.

Technical Analysis

AUD/USD declined below the 20 EMA at 0.7705 and is trying to settle below the next material support level at 0.7675. If this attempt is successful, AUD/USD will move towards the next support level which is located at 0.7635. No material levels were formed between 0.7635 and 0.7675 so this move may be fast.

In case AUD/USD settles below the support level at 0.7635, it will head towards the next support at the 50 EMA at 0.7610. A successful test of the 50 EMA will signal that AUD/USD is ready to gain additional downside momentum.

On the upside, the previous support at the 20 EMA at 0.7705 will likely serve as the first resistance level for AUD/USD. If AUD/USD manages to settle above this level, it will move towards the next resistance at 0.7725. A successful test of this level will open the way to the test of the next resistance at 0.7740.

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

This article was originally posted on FX Empire

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