In opinion of FX Strategists at UOB Group, the upside momentum in AUD/USD could extend to the 0.6490 zone in the next weeks.
Key Quotes
24-hour view: “Yesterday, we were of the view ‘there is room for AUD to test the solid resistance at 0.6430’. We highlighted that ‘a move above this level is not ruled out but in view of the overbought conditions, it is left to be seen if AUD can maintain a toe hold above this level’. AUD subsequently cracked 0.6430 and hit a high of 0.6445. While the recent advance in AUD is deep in overbought territory, there is no sign of weakness just yet. For today, AUD could continue to strengthen but overbought conditions suggests the strong resistance at 0.6490 is unlikely to come into the picture (0.6460 is already quite a strong level). Support is at 0.6405 but only a breach of 0.6375 would indicate the current upward pressure has eased.”
Next 1-3 weeks: “We highlighted yesterday (13 Apr, spot at 0.6335) ‘the rapid rise has moved into overbought territory but this does not ruled out further gains from here’ and added, ‘any advance is expected to encounter solid resistance at 0.6430’. AUD subsequently extended its gains and closed higher for the sixth straight day at 0.6384 (+0.56%). While the risk is still on the upside, overbought conditions could temper the pace of any further rise in AUD. From here, AUD could move above 0.6430 but it is left to be seen if it has enough momentum to challenge the next solid resistance at 0.6490. Overall, the current positive phase in AUD is deemed as intact until there is a breach of 0.6260 (‘strong support’ level was at 0.6230 yesterday).”
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