In light of the recent price action, further pullbacks in AUD/USD appear likely in the near term, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “Last Friday, we expected AUD to ‘dip below 0.6000’ but held the view that ‘the next support at 0.5960 is unlikely to come into the picture’. Our view was not wrong as AUD dropped to 0.5980 before staging a mild rebound. Downward momentum has picked up, albeit not by much and from here, there is room for AUD to move below the 0.5960 towards 0.5940. The next support at 0.5900 is likely out of reach. The current downward pressure is deemed as intact unless AUD can move back above 0.6070 (minor resistance is at 0.6040).”
Next 1-3 weeks: “AUD lost -1.00% last Friday as it dropped to a low of 0.5980. Downward momentum is beginning to improve and while we continue to expect AUD to trade in a broad 0.5900/0.6200 range (narrowed from 0.5900/0.6250 previously), the bottom of the range at 0.5900 appears to be more vulnerable. Looking ahead, if AUD closes below 0.5900, it would indicate the start of a deeper pullback towards 0.5750.”
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