AUD/USD Video 24.11.20.
Australian Dollar Gains Ground Against U.S. Dollar
AUD/USD is currently testing the resistance level at 0.7340 as the U.S. dollar is losing ground against a broad basket of currencies.
The American currency is under pressure on the foreign exchange market as traders evaluate the latest dovish signals from the Fed. Chicago Federal Reserve Bank President Charles Evans has recently stated that he believed that the Fed would keep rates at current levels until late 2023 or even 2024.
In addition, Wall Street Journal reported that President-elect Joe Biden would nominate the former Fed Chair Janet Yellen as the U.S. Treasury Secretary. The market expects that Yellen will be very dovish and push for more stimulus which will hurt the dollar and provide support to riskier assets.
In this light, yesterday’s upside move of the U.S. dollar, which happened after the release of better-than-expected Manufacturing PMI and Services PMI reports, may turn out to be a one-day short squeeze for those who were aggressively shorting the dollar.
AUD/USD managed to settle above the resistance at 0.7325 and is testing the next resistance level at 0.7340. This resistance level has already been tested three times in November, and AUD/USD faced strong resistance on each attempt to settle above 0.7340.
This time, AUD/USD should have a better chance to settle above 0.7340. RSI is in the moderate territory, and there is plenty of room to gain momentum in case the right catalysts emerge.
If AUD/USD settles above the resistance at 0.7340, it will get to the test of the next resistance level at 0.7360. A move above 0.7360 will open the way to the test of the resistance at 0.7380. In case AUD/USD settles above this level, it will head towards the resistance at 0.7400.
On the support side, the previous resistance at 0.7325 will likely serve as the first support level for AUD/USD. In case AUD/USD declines below this level, it will gain downside momentum and head towards the next support level at 0.7290.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire