The AUD / USD pair stayed afloat, despite the negative data on Australian inflation. The quote actually dropped at first to the middle of the 71st figure, but the bears could not continue the downward move so by the end of the Asian session, the aussie rolled back, returning to its previous level in the price chart. In other words, the data did not really help either the bears or the bulls, so the price continues to drift within the 71st price level in the trading chart.
From mid-May to April, Australia was still under quarantine, and it was only at the end of spring that the country began to open its economy. Hence, inflationary forecasts were of a decline of -2% in consumer price index for quarterly terms, and of -0.4% in annual terms. Such data practically came true, with the quarterly CPI really collapsing into negative territory for the first time since 2016, though not to -2%, but to -1.9%. In annual terms, the indicator was also slightly better, coming out at a level of -0.3% instead of -0.4%.
In other words, the data came out in the "green zone", but is still a record decline in inflation. indicators. But since the decline was already expected, the reaction of traders was understandable, and the 40-point drop in price was more of a reflex, especially since it was followed by a rollback.
Thus, the AUD / USD pair remained at the same positions as before, still at the 71st figure in the trading chart. Its prospects are still vague, given the behavior of the US dollar, which has declined and is trading around the middle of the 93rd figure. The dollar is still under pressure due to the coronavirus, especially since the daily increase of infected people again exceeded 60 thousand - yesterday, 64 thousand new patients were identified in the United States. Meanwhile, The New York Times has published an updated federal report, according to which there are already 21 states in the so-called "red zone". In these regions of the country, more than 100 new cases per 100 thousand people were registered in the last week. These include Alabama, Arizona, Kansas, California, Florida, Georgia, Idaho, Iowa, Kansas, Louisiana, Mississippi, Missouri, Nevada, North Carolina, North Dakota, Oklahoma, South Carolina, Tennessee, Texas, Utah, and Wisconsin. Only one state in the country is in the green zone - Vermont, which has fewer than 10 cases per 100,000 people per week. The published document "strongly recommends" the local authorities of the listed states to return to quarantine restrictions, and such prospects are putting pressure on the dollar.
But still, the bulls live on hope, especially since the Congress is considering a trillion-dollar bill to aid the US economy. Although there is no reason for any optimism so far, the document proposed by the White House has been criticized by both Democrats and some Republicans. Senate Minority Leader Chuck Schumer said that "the parties are still too far from a compromise," but in the Senate, the bill will most likely be approved. The House of Representatives will be much more difficult to pass though, so this factor is rather unreliable, especially considering the upcoming presidential elections in the United States.
Nevertheless, the prospects for the AUD / USD pair depend on the US dollar, so if the currency continues to move downward in the market, the aussie will test the 72nd figure. Otherwise, the pair will continue to dangle in a flat, within the 71st price level. In addition, the Australian dollar currently does not have sufficient factors to move the quotes upward, and the smoldering conflict between China and Australia periodically reminds itself, which puts pressure on the aussies. For example, this week, Canberra, following Washington, rejected a number of China's territorial claims in the South China Sea. In particular, according to the United States, the disputed territories of the Spratly archipelago are not islands and do not form an exclusive economic zone. China does not agree with this position, while the Australians supported the opinion of the US on this issue. This is just one episode that highlights the uneasy relationship between Canberra and Beijing.
Thus, the prospects for the pair counts on the movement of the US dollar, and given the sluggish reaction of traders to the inflation report from Australia, it can be assumed that the US dollar will set the tone for trading in the near future. The AUD/USD pair is trading in a range from current positions, therefore, long positions targeting the level of 0.7190 can be considered. If the pair does not show impulsive movements, sell positions from this level, to the bottom of the 71st figure.