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FX Strategists at UOB Group now believe a move to the 0.7200 region could be losing traction in the short-term.

Key Quotes

24-hour view: “We highlighted last Friday that ‘momentum indicators are still mostly neutral and AUD is likely to continue to consolidate from here albeit at a lower range of 0.7070/0.7150’. AUD subsequently traded within a narrower range than expected (between 0.7064 and 0.7125) before closing little changed at 0.7106 (+0.08%). The underlying tone has firmed somewhat and from here, AUD could edge above 0.7150 but for now, a sustained rise above this level is unlikely (next resistance is at 0.7200). Support is at 0.7090 followed by 0.7060.”

Next 1-3 weeks: “Our latest narrative was from last Wednesday (22 Jul, spot at 0.7135) wherein ‘upward momentum in AUD received a strong boost and the next level to focus on is at 0.7200’. AUD subsequently popped to a high of 0.7164 but the lack of a follow-through thereafter came as a surprise. For now, we continue to see chance, albeit a diminished one for AUD to move to 0.7200. Only a breach of 0.7030 (no change in ‘strong support’ level) would indicate the current upward pressure has dissipated.”