AUD/USD Video 04.05.21.
U.S. Dollar Gains Ground Against Australian Dollar
AUD/USD has recently made an attempt to settle below the support at the 50 EMA at 0.7710 while the U.S. dollar gained ground against a broad basket of currencies.
The U.S. Dollar Index has recently tested the resistance at the 20 EMA at 91.30 but failed to develop sufficient upside momentum and pulled back. In case the U.S. Dollar Index gets above the 20 EMA, it will move towards 91.50 which will be bearish for AUD/USD.
Today, foreign exchange market traders focused on RBA Interest Rate Decision. RBA decided to leave the rate unchanged at 0.1%, in line with the analyst consensus.
RBA noted that the economic recovery in Australia was stronger than expected. RBA also added that the number of people with a job exceeded pre-pandemic level.
RBA revised its central scenario for GDP growth and now expects that Australia’s GDP will grow by 4.75% in 2021 and 3.5% in 2022. Interestingly, RBA believes that inflation will remain modest despite strong employment and GDP growth.
Importantly, RBA reiterated that it was not considering a change of a 0.1% yield target for 3-year government bonds. As a result, low yields will continue to serve as a bearish catalyst for the Australian dollar.
AUD/USD declined below the support at the 20 EMA at 0.7730 and made an attempt to settle below the support at the 50 EMA at 0.7710. If AUD/USD gets below the 50 EMA, it will test the next support level at 0.7700.
A successful test of the support at 0.7700 will open the way to the test of the support at 0.7665. If AUD/USD declines below this level, it will head towards the support at 0.7635.
On the upside, the 20 EMA will serve as the first resistance level for AUD/USD. A move above the 20 EMA will push AUD/USD towards the resistance at 0.7750. In case AUD/USD settles above this level, it will head towards the next resistance at 0.7775. A successful test of this level will open the way to the test of the resistance at 0.7800.
For a look at all of today’s economic events, check out our economic calendar.