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FX Strategists at UOB Group remain bearish on AUD/USD, although a move below 0.6670 appears unlikely for the time being.

Key Quotes

24-hour view: “We highlighted last Friday that AUD “could dip below 0.6700 but last year’s low at 0.6670 is not expected to come into the picture”. AUD subsequently dropped to 0.6683 before ending the day on a soft note at 0.6686. Conditions remain severely oversold but it is too early to expect a recovery. AUD is more likely to lick its wounds and consolidate at these lower levels. Expected range for today, 0.6675/0.6715.”

Next 1-3 weeks: “For now, we are holding on to our view from Tuesday (28 Jan, spot at 0.6760) wherein while AUD could continue to weaken, severely oversold conditions suggest last year low at 0.6670 may not come into the picture. That said, AUD is not out of the woods just yet and only a move above 0.6780 (‘strong resistance’ level previously at 0.6810) would indicate the current weakness has stabilized.”