In opinion of FX Strategists at UOB Group, the Aussie Dollar is expected to trade on a negative performance in the next weeks.
Key Quotes
24-hour view: “AUD traded within a 0.7059/0.7106 range yesterday, relatively close to our expected 0.7065/0.7110 consolidation range. The subsequent weak daily closing (NY close of 0.7060) suggests downward pressure is increasing and the immediate bias is tilted to the downside. Barring a move back above 0.7100 (minor resistance at 0.7080), we see chance for AUD to take out the year’s low near 0.7040. At this stage, a sustained decline below this level seems unlikely (next support is at 0.7020)”.
Next 1-3 weeks: “As highlighted, “the prospect for a break of the year-to-date low of 0.7041 has increased, albeit not by much”. AUD subsequently dipped to a 2-week low of 0.7056 before rebounding quickly to end the day slightly higher (NY close of 0.7087, +0.06%). Overall, we continue to hold the same view wherein we expect AUD to trade with a slight downward bias for the next few days. Only a break above 0.7140 would suggest that the current mild downward pressure has eased. Looking ahead, a break of 0.7040 would shift the focus to the round number support of 0.7000″.
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