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In light of the recent price action, the Aussie Dollar is seen consolidating in the near term, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday “a dip below 0.7220 seems likely but a break of 0.7190 would come as a surprise”. The subsequent price action was line with our expectation as AUD dipped to a low of 0.7203 before rebounding. Downward pressure has eased with the rebound but it is too early to expect a sustained recovery. AUD is more likely to consolidate and trade sideways to slightly higher from here. Expected range for today; 0.7210/0.7260″.

Next 1-3 weeks: “The immediate ‘target’ of 0.7220 that was first highlighted on Monday (13 Aug, spot at 0.7285) was exceeded as AUD reached a low of 0.7203 yesterday (15 Aug). Despite the relatively strong bounce from the low, we continue to see chance for AUD to weaken further to the next ‘target’ at 0.7160. However, oversold short-term indicators suggest AUD could consolidate for a few days first before staging the next down-leg. On the upside, only a break of 0.7330 (‘stop-loss’ level unchanged) would indicate that the current bearish phase has ended”.