The Aussie Dollar is expected to trade sideways in the short-term horizon, noted FX Strategists at UOB Group.
Key Quotes
24-hour view: “AUD staged a surprisingly swift and strong surge last Friday and recouped almost all of last Thursday’s outsized decline (NY close of 0.7325, +1.05%). The rally is running too fast, too soon and while a test of 0.7360 is not ruled out, a clear break above last week’s top near 0.7380/85 seems highly unlikely. Support is at 0.7305 but only a break of 0.7290 would indicate that a short-term top is in place”.
Next 1-3 weeks: “AUD reversed almost all of Thursday sharp drop of -1.39% as it surged and closed at 0.7326 in NY last Friday (+1.04%). Such back-to-back move of more than 1% of opposite direction is rare and the last time we witnessed such price action was more than 2 years ago in June 2016. While downward pressure has eased with the sharp rebound, AUD does not appear to be ready to extend its advance significantly from here. To put it another way, there is no change to the current neutral outlook and we expect AUD to trade sideways, likely within a 0.7250/0.7420 range”.
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