AUD/USD Daily Forecast – U.S. Dollar Remains Under Pressure

AUD/USD Video 03.03.21.

Australian Dollar Continues To Gain Ground Against U.S. Dollar

AUD/USD is currently trying to settle above the resistance at 0.7820 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to get to the test of the resistance at 90.90 but failed to develop sufficient upside momentum and pulled back. The nearest support level for the U.S. Dollar Index is located at the 50 EMA at 90.70. If the U.S. Dollar Index settles below this level, it will head towards the 20 EMA at 90.60 which will be bullish for AUD/USD.

Today, Australia reported that Services PMI declined from 55.6 in January to 53.4 in February compared to analyst consensus of 54.1. Australia also reported that its GDP grew by 3.1% in the fourth quarter on a quarter-over-quarter basis compared to analyst consensus which called for growth of 2.5%.

Australian economy continues to rebound thanks to the country’s success in virus containment and the economic strength of its main trading partner, China. The recent strength of the commodity markets may provide additional support to the Australian economy in the first quarter of 2021.

Technical Analysis

AUD/USD is testing the nearest resistance level at 0.7820. If this test is successful, AUD/USD will move towards the next resistance at 0.7860. No important levels have emerged between 0.7820 and 0.7860 so this move may be fast.

In case AUD/USD gets above the resistance at 0.7860, it will head towards the next resistance level at 0.7875. A move above this level will push AUD/USD towards the resistance at 0.7890.

On the support side, the nearest support level for AUD/USD is located near the 20 EMA at 0.7800. If AUD/USD declines below the 20 EMA, it will move towards the support at 0.7780. A successful test of the support at 0.7780 will open the way to the test of the next support level at 0.7760.

From a big picture point of view, AUD/USD quickly managed to gain upside momentum after the recent sell-off and has good chances to continue its general upside trend.

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