Yesterday, the AUD/USD pair showed an upward correction, taking advantage of the US dollar's general weakening. However, the Australian dollar began to lose ground again during the Asian session on Wednesday. Notably, the AUD/USD pair is declining not only due to the dollar rally, but also due to the weakness of the Australian one, which is also observed in many cross pairs. Apparently, traders are concerned about the prospects for the Australian labor market amid the upcoming completion of the government's JobKeeper program. Some currency strategists at banking conglomerates, which includes the Commonwealth Bank of Australia, presented extremely pessimistic forecasts contrary to the general optimism associated with Australia's economic recovery.
Overall, the future prospects of the AUD/USD pair will depend on the dynamics of the US currency. In this case, the Australian dollar has to follow the US dollar amid the above-mentioned fundamental factors, which will be guided by the release of growth of US inflation data.
From a technical viewpoint, the downward impulse of the AUD/USD pair is still not over. If the US inflation does not disappoint investors, the AUD will strengthen the decline and move to the base of the 0.76 level. The downward target is the nearest support level set at 0.7605 – lower line of the Bollinger Bands indicator on the daily time frame. Meanwhile, the main support is located below it, which is the target of 0.7550 (lower limit of the Kumo cloud on the same time frame).
