In opinion of FX Strategists at UOB Group, AUD/USD could retest the 0.6700 area on a breakdown of 0.6755.
Key Quotes
24-hour view: “The continuous weakness in AUD came as a surprise as it closed sharply lower for the third straight day (0.6764, -0.38%). The rapid decline still appears to be over-extended even though with no sign of stabilization yet, it is too early to expect a recovery. AUD is more likely to consolidate its loss and trade sideways at these lower levels, expected to be within a 0.6755/0.6795 range”.
Next 1-3 weeks: “While we highlighted last Friday (20 Sep, spot at 0.6795) that AUD is expected to “trade with a downward bias towards 0.6755″, the rapid decline that quickly touched 0.6760 was not exactly expected. The price action has increased the prospect for further AUD weakness and a break of 0.6755 would shift the focus to the next support at 0.6700. On the upside, only a move above 0.6820 (‘strong resistance’ was at 0.6850 last Friday) would indicate the current downward pressure has eased. Meanwhile, oversold short-term conditions could lead to a couple of days of consolidation first”.
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