AUD/USD is seen reclaiming the 0.70 level in the next weeks, noted FX Strategists at UOB Group.
Key Quotes
24-hour view: “Last Friday, we highlighted that AUD ‘could advance nearer to 0.7000 but a sustained rise above this level is unlikely for today’. AUD subsequently popped to 0.7013 before easing off quickly to trade sideways for the rest of the sessions. While conditions remain severely overbought, the recent strength in AUD has proven to be resilient. In other words it is too early to expect a sustained pullback. For today, AUD is more likely to consolidate and trade sideways at these higher levels, expected to be between 0.6940 and 0.7010.”
Next 1-3 weeks: “We highlighted last Friday (05 Jun, spot at 0.6935) that ‘the 0.7000 level appears to be within reach’ and added, ‘the next resistance at 0.7030 may not come into the picture so soon’. AUD subsequently moved above 0.7000 but it eased off quickly from 0.7013. While it is premature to call for an end the positive phase that started about 3 weeks ago, the rally in AUD appears to be over-extended, both time and price wise. For now, we do not rule out a move above 0.7030 but the prospect for a sustained rise beyond 0.7065 is not high. On the downside, a breach of 0.6870 (‘strong support’ level was 0.6830 last Friday) would indicate the current positive phase has run its course.”
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