AUD/USD Video 04.03.21.
Australian Dollar Gains Ground Against U.S. Dollar
AUD/USD is testing the resistance at 0.7800 while the U.S. dollar is gaining ground against a broad basket of currencies.
The U.S. Dollar Index is currently trying to settle above the nearest resistance level at 91.10. If this attempt is successful, the U.S. Dollar Index will head towards the resistance at 91.30 which will be bearish for AUD/USD. However, it should be noted that AUD/USD may ignore dollar’s strength today as the Australian dollar is supported by improved sentiment towards commodity-related currencies.
Today, Australia reported that Retail Sales increased by 0.5% month-over-month in January compared to analyst consensus which called for growth of 0.6%. The report was mostly in line with analyst expectations as the Australian economy continued to rebound thanks to the country’s success in virus containment.
Later, traders’ attention will shift to employment reports from the U.S. Analysts expect that Initial Jobless Claims will increase from 730,000 to 750,000 while Continuing Jobless Claims will decline from 4.42 million to 4.3 million.
Traders will also continue to monitor the situation in the U.S. government bond market. Treasury yields are pulling back a bit but remain close to multi-month highs which is bullish for the American currency.
AUD/USD managed to settle above the 20 EMA at 0.7790 and is trying to settle above the resistance level at 0.7800. If this attempt is successful, AUD/USD will get to another test of the next resistance level at 0.7820. This resistance level has already been tested several times in recent trading sessions and proved its strength.
If AUD/USD gets above the resistance at 0.7820, it will head towards the next resistance at 0.7860. A move above this level will open the way to the test of the resistance at 0.7875.
On the support side, AUD/USD will likely get material support in the 0.7780 – 0.7800 area. If AUD/USD settles below the support level at 0.7780, it will head towards the next support level which is located at 0.7760.
For a look at all of today’s economic events, check out our economic calendar.