AUD/USD’s upside momentum seen struggling above the 0.7800 level in the near-term, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “Yesterday, we highlighted that ‘oversold conditions suggest further AUD weakness is unlikely’ and we expected AUD to ‘trade sideways between 0.7735 and 0.7780’. AUD subsequently rose 0.7790, dropped to 0.7732 before snapping back up to end the day at 0.7769 (+0.23%). The rapid swings have resulted in a mixed outlook. AUD could trade in a choppy manner from here, albeit likely within a higher range of 0.7740/0.7800.”
Next 1-3 weeks: “We have held a positive view in AUD since early last week. After AUD retreated from 0.7805, we highlighted on Wednesday (17 Feb, spot at 0.7745) that ‘upward momentum has been waned quickly and the odds for further AUD strength have diminished considerably’. We highlighted that ‘a break of the ‘strong support’ at 0.7720 would indicate that 0.7805 is the extent of the recent AUD strength’. AUD subsequently dropped to 0.7725 but has since rebounded. Upward momentum still appears lackluster and any advance is expected to face solid resistance at 0.7805. Note that there is another strong level at 0.7820. All in, while the outlook is still deemed positive, barring a sudden surge in momentum, AUD is likely to struggle to move clearly above the solid resistance zone between 0.7805 and 0.7820. On the downside, the ‘strong support’ level remains unchanged at 0.7720.”
Share
