Strategists at UOB Group suggested that the outlook on AUD/USD should shift to positive on a close above 0.7025.
Key Quotes
24-hour view: “Last Friday, our view for AUD was for it to “drift higher and test the strong 0.7025 resistance”. AUD subsequently touched a high of 0.7025 before closing right at the high in NY. AUD opened strongly this morning and extended its gain 0.7039. The advance appears to be ‘overextended’ and further sustained gains appear unlikely from here. That said, it is too early to expect a significant pullback. AUD is more likely to consolidate its gains and trade sideways at these higher levels, expected to be within a 0.7000/0.7040 range”.
Net 1-3 weeks: “We expected AUD to strengthen further since last Thursday (27 Jun, spot at 0.6985) and indicated that AUD is expected to “trade with an ‘upside bias’ and move to 0.7025″. We added last Friday (28 Jun, spot at 0.7005) that “if AUD were to close above 0.7025, it would indicate the start of a ‘positive phase’ towards 0.7065″. AUD subsequently touched 0.7025 during NY hours on Friday before extending its gains upon opening this morning. In other words, our view from here is “only a NY closing above 0.7025 would indicate the start of a ‘positive phase’ in AUD”. The prospect for AUD to close above 0.7025 is not very high for now but it would remain intact until the strong support at 0.6960 is taken out (level was at 0.6930 previously)”.
Share
