In opinion of FX Strategists at UOB Group, the bearish phase in AUD/USD could be over.
Key Quotes
24-hour view: “We indicated yesterday ‘a breach of key levels could lead to a rapid move’. AUD subsequently cracked the 0.6720 resistance and surged to a high of 0.6742. While the rapid advance appears to be running ahead of itself, there is scope for AUD to move towards the strong resistance at 0.6760. For today, this level could be strong enough to check AUD strength. On the downside, a breach of 0.6700 would suggest the current upward pressure has run its course.”
Next 1-3 weeks: “AUD eked out a fresh low of 0.6679 yesterday before turning around and surged by +0.67% (0.6738), the largest 1-day advance in 2 months. While our ‘strong resistance’ level at 0.6760 is still intact, the price action suggests the weak phase in AUD that started in early January could be close to an end. From here, unless AUD move and stay below 0.6700 within these couple of days, a breach of 0.6760 would not be surprising. Looking ahead, if AUD were to move above 0.6760, it would signal the start of a correction phase (too early to expect a major reversal).”
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