Further upside in AUD/USD appears to have lost some momentum as of late, noted UOB Group’s FX Strategists.
Key Quotes
24-hour view: “We highlighted yesterday that AUD ‘could break 0.7840 but overbought conditions suggest it may not be able to maintain a foothold above this level’. While our view was not wrong as AUD rose to 0.7849, we did not anticipate the subsequent swift decline (AUD dropped to 0.7750 during late NY hours). The rapid drop has scope to dip below 0.7720 but the next support at 0.7700 is likely ‘safe’ for now. Resistance is at 0.7775 followed by 0.7800.”
Next 1-3 weeks: “After AUD cracked 0.7820, we highlighted yesterday (18 Mar, spot at 0.7820) that AUD is ‘expected to trade with an upward bias towards 0.7870’. We added, ‘the current upward bias in AUD is deemed intact as long as it does not move below the ‘strong support’ at 0.7720′. AUD subsequently rose to 0.7849 before staging a surprising swift decline (overnight low of 0.7750). While 0.7720 is still intact, the rapid loss in momentum suggests AUD is unlikely to strengthen further. AUD is more likely to trade between 0.7675 and 0.7820.”
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