The pressure on the AUD/USD pair is increasing against the background of the rapid spread of the delta coronavirus strain in Australia and the strengthening of the US dollar after the publication of inflation data in the US.
AUD/USD forex forecast and analytics for July 19-20, 2021
Investors are still concerned about the epidemiological situation in the country. On Thursday, the state of Victoria was blocked for five days after a surge in COVID-19 infections. Market participants' concern about the spread of the coronavirus supports the US dollar and weakens other currencies. On July 13, US inflation data for June was published. The core consumer price index showed an annual growth of 4.5%, although analysts had expected 4.0%, and on a monthly basis it was 0.9%, higher than the previous value of 0.7% (and the forecast of 0.4%). The consumer price index showed an increase of 0.9% for the month.
Investors are putting the tightening of the US Federal Reserve's monetary policy into the current price of the US dollar, despite yesterday's statement by the head of the regulator, Jerome Powell, that a reduction in asset purchases is not yet envisaged. Nevertheless, the official admitted that inflation is growing faster than expected, and if it goes beyond the permissible limits, it will be necessary to tighten monetary policy ahead of time.
Support and resistance levels
The long-term trend is downward within the framework of the forex forecast. The AUD/USD pair has broken through the support level of 0.7477 and is trying to test the 0.7374 mark. If the level of 0.7374 is held by buyers, a correction may develop. If the level of 0.7374 is broken, the price will continue to decline to the area of 0.7228.
The medium-term trend is downward. The sales target is the target zone 3 0.7350-0.7332. At the moment, market participants are trying to break through the support level of 0.7419. If they succeed, we will probably see the achievement of the target zone 3. If the 0.7419 mark is held, then we should expect a correction with the target of 0.7490.