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The outlook in AUD/USD remains positive and further consolidation in the 0.7030-0.7230 range is likely in the near-term.

Key Quotes

24-hour view: “We expected AUD to strengthen yesterday but we were of the view that ‘the next resistance at 0.7140 is unlikely to come under threat’. AUD subsequently rose to an overnight high of 0.7138, closed at 0.7133 (+0.88%) before extending its advance after opening this morning. Momentum is building up steadily and AUD could extend its advance to 0.7175. For today, 0.7195 is likely out of reach. On the downside, only a break of 0.7095 (minor support is at 0.7110) would indicate that the current upward pressure has eased.”

Next 1-3 weeks: “Yesterday (29 Sep, spot at 0.7090), we highlighted that ‘shorter-term momentum is beginning to wane’ and added, ‘a break of 0.7140 would indicate that the negative phase in AUD has run its course’. AUD just breached 0.7140 at the time of writing. In other words, last Friday’s (25 Sep) low of 0.7006 is likely an interim bottom. The current movement is deemed as the early stages of a consolidation phase. Shorter-term, the bias is tilted to the upside but any advance is viewed as part of a broader range of 0.7030/0.7230 (a sustained advance above 0.7230 is not expected).”