Further gains in AUD/USD could see the 0.6580 area revisited in the next weeks, noted FX Strategists at UOB Group.
Key Quotes
24-hour view: “We highlighted yesterday that ‘further AUD strength is not ruled out but overbought conditions suggest that a break of 0.6490 is unlikely’. The subsequent AUD strength exceeded our expectation as it soared to a high of 0.6514. The advance in AUD is deep in overbought territory now but upward momentum remains robust. From here, there is room for AUD to extend its gains to 0.6545. For today, the next resistance at 0.6580 is unlikely to come into the picture. On the downside, 0.6450 is likely strong enough to hold for today (minor support is at 0.6475).”
Next 1-3 weeks: “Yesterday, we held the view that ‘a NY closing above 0.6490 would suggest further AUD strength towards 0.6580’. AUD subsequently soared to 0.6514 before ending the day at 0.6493 (+0.45%). While overbought short-term conditions could slow the pace any advance, AUD is likely to strengthen further towards 0.6580. Only a breach of 0.6410 (‘strong support’ level was at 0.6360 yesterday) would indicate that the current upward pressure has eased.”
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