AUD/USD Daily Forecast – Test Of Support At 0.7700

AUD/USD is under pressure as commodity markets move lower.
U.S. Dollar Gains Ground Against Australian Dollar
AUD/USD is currently trying to settle below the support at 0.7700 while the U.S. dollar is gaining ground against a broad basket of currencies.
The U.S. Dollar Index is currently testing the resistance level at 92. This resistance level has already been tested many times, and the U.S. Dollar Index failed to settle above 92. Interestingly, Treasury yields are moving lower but foreign exchange market traders continue to provide support to the American currency. If the U.S. Dollar Index gets above 92, it will gain additional upside momentum and head towards the resistance at 92.25 which will be bearish for AUD/USD.

Today, AUD/USD traders will likely focus on the dynamics of commodity markets which are under pressure. Stronger environmental controls in China and the third wave of coronavirus in Europe serve as main bearish catalysts for commodities.

Other commodity-related currencies like Canadian dollar are also under pressure in the current environment. If WTI oil manages to settle back below the psychologically important $60 level, commodity-related currencies will likely find themselves under more pressure.
Technical Analysis
AUD/USD is currently testing the support at 0.7700. In case this test is successful, AUD/USD will head towards the next support level at 0.7665. RSI remains in the moderate territory and there is plenty of room to gain additional downside momentum.

If AUD/USD declines below the support at 0.7665, it will head towards the next support level at 0.7635. A move below this level will push AUD/USD towards the support at 0.7600.

On the upside, AUD/USD needs to get back above 0.7700 to have a chance to develop upside momentum in the near term. If AUD/USD settles above this level, it will head towards the next resistance which is located at the 50 EMA at 0.7730.

In case AUD/USD settles above the 50 EMA, it will move towards the next resistance level at the 20 EMA at 0.7745. A move above the 20 EMA will signal that AUD/USD will try to develop additional upside momentum.