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Further upside in AUD/USD could visit the 0.7070 region in the near term, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We were of the view the “rapid advance in AUD has scope to extend to 0.7050″ yesterday. AUD subsequently rose to 0.7048 before pulling back quickly and traded sideways for rest of the day. Upward pressure has waned and AUD is expected to consolidate and trade sideways at these higher levels, likely between 0.7010 and 0.7045″.

Next 1-3 weeks: “The manner of which AUD recovered from the sharp plunge on Monday (01 Jul) came as a surprise. After the rapid decline, we held the view on Tuesday (02 Jul, spot at 0.6965) that AUD has moved into a ‘sideway-trading phase’. The price action over the past couple of days indicates that our expectation is incorrect. The rapid improvement in momentum suggests the near-term bias is on the upside but for now, solid resistance can be expected at 0.7070. Looking ahead, if AUD were to register a NY close above 0.7070, it would indicate AUD is ready to challenge the major 0.7100 resistance. All in, AUD is expected to trade with an upside bias as long as it stays above the strong support at 0.6980″.