Australian dollar continues to gain ground against US dollar
AUD / USD recently attempted to move above 0.7550 as the US Dollar was generally stable against a large basket of currencies.
The US dollar index recently attempted to test the annual lows at 90.50 but failed to develop sufficient downward momentum. As a result, the US dollar index remains in a range between support at 90.50 and resistance at 91. A move above the resistance level at 91 will push the US dollar index towards the next resistance at 91. .50 which will be bearish for the AUD / USD.
The Australian dollar has recently benefited from strong support in the forex market due to strength in commodity markets. Iron ore prices recently hit multi-year highs, while WTI oil managed to break above the $ 47 level, providing support for commodity currencies.
Yesterday, the United States reported that initial jobless claims rose to 853,000 as the second wave of the virus began to put serious pressure on the job market. It remains to be seen whether recent labor market data will push U.S. lawmakers to step up stimulus talks, as U.S. House of Commons Speaker Nancy Pelosi recently said those talks could extend beyond Christmas. .
Technical analysis
AUD / USD took strong upward momentum and tested the resistance level near 0.7575. The RSI is in overbought territory so the risk of a pullback is high. Currently, AUD / USD is attempting to stay above the nearest support level at 0.7535.
In the event that the AUD / USD moves below this support level, it will head to the next support at 0.7500. A successful test of this support level will push the AUD / USD towards the support at 0.7485.
On the upside, AUD / USD needs to stay above 0.7535 to continue its bullish movement. The next level of resistance for the AUD / USD is located near the recent highs at 0.7575. If the AUD / USD manages to settle above this resistance level, it will gain additional upside momentum and head to the next resistance at 0.7600.
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