AUD/USD is seen navigating the 0.71-0.7260 range in the next weeks, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “We expected AUD to weaken yesterday but noted that ‘rapid decline is already oversold and for today, any weakness is likely limited to 0.7150 (next support is at 0.7100)’. AUD subsequently dipped to 0.7137 before rebounding quickly. Downward pressure has dissipated and the current movement is viewed as part of a consolidation phase. For today, AUD is likely to trade sideways, expected to be between 0.7165 and 0.7230.”
Next 1-3 weeks: “We highlighted yesterday (19 Aug, spot at 0.7245) that ‘odds for AUD to move clearly above 0.7300 have increased considerably’. However, we noted that ‘we still prefer to wait for an added confirmation of a daily closing above 0.7280’. AUD subsequently rose to 0.7275 before plunging back down to 0.7179. While our ‘strong support’ level at 0.7170 is still intact, the sharp drop of -0.90% (0.7179) has resulted in a rapid loss in momentum. In other words, further AUD strength is unlikely for now. AUD is more likely to trade sideways for a period, expected to be within a 0.7100/0.7260 range.”
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