US Markets

AUD/USD Daily Forecast – Range-Bound Between 0.7075 And 0.7100

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AUD/USD Video 16.10.20.

Australian Dollar Is Flat Against U.S. Dollar Ahead Of The Weekend

AUD/USD is mostly flat after yesterday’s sell-off as the U.S. dollar is little changed against a broad basket of currencies.

The U.S. Dollar Index continues to test the nearest resistance level at the 50 EMA at 93.75. It has already made several attempts to settle above this level but faced strong resistance.

In case the U.S. Dollar Index manages to settle above the 50 EMA, it will gain significant momentum and continue its upside move which will be bearish for AUD/USD.

Yesterday, U.S. Initial Jobless Claims report indicated that the job market recovery has stalled as Initial Jobless Claims increased from 845,000 to 898,000. It is not clear whether U.S. Republicans and Democrats will be able to reach consensus on the new coronavirus aid package before the November election so job market reports may get worse in the next few weeks.

Today, AUD/USD traders will focus on the new economic reports from the U.S. Retail Sales are expected to increase by 0.7% in September on a month-over-month basis. Industrial Production is projected to grow by 0.5% month-over-month while Manufacturing Production is expected to increase by 0.7%.

Technical Analysis

AUD/USD did not manage to settle below the support level at 0.7075 and remains in the range between 0.7075 and the nearest resistance at 0.7100.

If AUD/USD gets below the support at 0.7075, it will gain downside momentum and head towards the next material support level at 0.7030, although it may also get some support near the recent lows at 0.7055.

In case AUD/USD moves below the support at 0.7030, it will decline towards September lows at 0.7005.

On the upside, AUD/USD needs to get above the nearest resistance level at 0.7100 to have a chance to develop upside momentum. If AUD/USD gets above this resistance level, it will move towards the next resistance at 0.7130.

A move above the resistance at 0.7130 will open the way to the test of the next resistance at 0.7150. The 20 EMA is located at 0.7160 so the resistance area at 0.7150 – 0.7160 is set to be a strong obstacle on the way up for AUD/USD.

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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