Australian dollar gains ground against US dollar earlier in week
AUD / USD attempted to move above 0.7300 as the US Dollar was broadly stable against a large basket of currencies earlier in the week.
The US dollar index recently attempted to move below the nearest support level at 92.10 but failed to pick up sufficient bearish momentum and rebounded closer to 92.25. The closest significant resistance level for the US dollar index is located at 92.50. If the US dollar index moves towards this level, the AUD / USD will come under some pressure.
Today, Australia reported that building permits were up 15.4% month-over-month in September, according to analysts’ forecasts. There are no other major economic reports expected to be released today in Australia and the United States, so the dynamics of AUD / USD trading will primarily depend on general market sentiment.
Currently, demand for riskier assets is increasing as traders believe Donald Trump will not be able to challenge Joe Biden’s victory in the US presidential election and will soon have to admit defeat.
A certain outcome is almost always better for markets than uncertainty, so riskier currencies like the Aussie dollar continue to have support from traders gearing up for Biden’s presidency.
AUD / USD managed to break above resistance at 0.7275 and attempted to move above 0.7300. The closest resistance level for AUD / USD is located at 0.7310.
If the AUD / USD manages to break above this level, it will gain additional upside momentum and head towards the next resistance at 0.7325. In the event that the AUD / USD moves above the resistance at 0.7325, it will continue its bullish movement and hit the resistance test at 0.7340.
On the support side, the previous resistance at 0.7275 will likely serve as the first level of support for AUD / USD. A move below this level will pave the way for testing the next support at October highs at 0.7240. If the AUD / USD drops below this level, it will head to the next support level at 0.7210.
For an overview of all of today’s economic events, check out our economic calendar.