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AUD/USD Daily Forecast – Resistance At 0.7130 In Sight

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AUD/USD Video 22.10.20.

Australian Dollar Continues Its Upside Move

AUD/USD has managed to stay above 0.7100 and tries to continue its rebound while the U.S. dollar is mixed against a broad basket of currencies.

The U.S. Dollar Index made an attempt to settle above the nearest resistance level at 92.80 but lost upside momentum and declined towards 92.60. The nearest support level for the U.S. Dollar Index is located at 92.50. In case the U.S. Dollar Index declines below this level, it will gain additional downside momentum and head towards the 92 level which will be bullish for AUD/USD.

Today, AUD/USD traders will focus on U.S stimulus news and the latest U.S. employment data. Tomorrow, Australia and U.S. will publish flash PMI data for October.

Australia’s Services PMI is forecast to grow from 50.8 to 51 while Manufacturing PMI is expected to increase from 55.4 to 55.6. In the U.S., analysts project that Services PMI will stay unchanged at 54.6 while Manufacturing PMI will increase from 53.2 to 53.4.

Analysts forecasts look optimistic for both Australia and U.S. If PMI reports are worse than expected, traders may rush to purchase safe haven assets like the U.S. dollar which will be bearish for AUD/USD.

Technical Analysis

AUD/USD has settled above 0.7100 and is trying to get to the test of the nearest resistance level at the 20 EMA at 0.7130. In case AUD/USD manages to settle above the resistance at 0.7130, it will head towards the next resistance level at the 50 EMA at 0.7150.

A move above the 50 EMA will signal that AUD/USD gained strong upside momentum. In this case, AUD/USD will head towards the next resistance at 0.7180.

On the support side, the previous resistance level at 0.7100 will likely serve as the first important support level for AUD/USD. If AUD/USD declines below this level, it will gain downside momentum and head towards the support at 0.7075.

A successful test of the support level at 0.7075 will open the way to the test of the next support near the recent lows at 0.7030.

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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