AUD/USD’s downside momentum seems to be gaining pace, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “We expected AUD to trade sideways between 0.7265 and 0.7305 yesterday. AUD subsequently rose to a high of 0.7310 before staging a sharp and sudden sell-off that sent it plummeting to an overnight low of 0.7211. The rapid drop appears to be running ahead of itself but with no sign of stabilization just yet, AUD could continue to weaken. That said, the major support at 0.7150 is unlikely to come into the picture for today (there is another support at 0.7175). Resistance is at 0.7235 but AUD has to move back above 0.7260 in order to indicate that the current weakness has stabilized.”
Next 1-3 weeks: “Our latest narrative for AUD was from last Friday (04 Sep, spot at 0.7275) wherein AUD is expected to ‘trade sideways’ but the weakened underlying tone suggests ‘a lower range of 0.7190/0.7360’. While the bottom of the expected range is still intact (overnight low of 0.7211), downward momentum has picked up quickly and from here, AUD is expected to trade with a downward bias towards 0.7150. At this stage, the odds for a sustained decline below this level is not high. Overall, the current mild downward pressure is deemed as intact unless AUD moves back above 0.7295 within these few days.”
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