General analysis AUDUSD for 21.12.2021
Current Dynamics
The U.S. dollar was under pressure on Tuesday after a sudden rejection of a $1.75 trillion stimulus package extension. The bill has not yet been rejected by Congress, but the key senator, moderate Democrat Joe Manchin, has already opposed Biden's initiative, which caused criticism from the White House. In response, Manchin accused the Democratic Party of pushing for more debt, which will not allow a rapid response to the challenges posed by pandemic and geopolitical threats.
At the same time the AUDUSD received support after the Reserve Bank of Australia announced the minutes of its latest meeting. The regulator said the spread of the Omicron strain should not affect the country's economic recovery. If economic activity continues to grow at the current rate, the central bank will stop buying assets ahead of schedule. The next RBA meeting is in February 2022, so the regulator will have plenty of time to assess the impact of the new strain on economic activity.
No significant publications from either side are expected today. Tomorrow at 3:30 p.m. (GMT+2), US GDP data for the third quarter is expected to be released. At 17:00 (GMT+2) the U.S. will release reports on consumer confidence and secondary housing market sales.
Support and resistance levels
On the 4-hour chart the instrument is strengthening at the bottom of the Bollinger Bands. The key resistance is the moving average of the indicator. The indicator is directed sideways and the price range is widening, indicating the beginning of the uptrend formation. MACD histogram is in the negative zone, holding a weak sell signal. Stochastic is preparing to enter the overbought area, a strong sell signal is expected within 1-2 days.
- Support levels: 0.7000, 0.7030, 0.7075, 0.7115.
- Resistance levels: 0.7145, 0.7170, 0.7085, 0.7215.
Trading scenarios
- Long positions should be opened above the level of 0.7150 with a target of 0.7215 and a stop-loss at 0.7115. Implementation period: 1-3 days.
- Short positions can be opened below the level of 0.7110 with a target of 0.7055 and a stop loss at the level of 0.7140. Implementation period: 1-3 days.