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In opinion of FX Strategists at UOB Group, AUD/USD could slip back to the 0.6730 and below in the next weeks.

Key Quotes

24-hour view: “The sudden sharp sell-off in AUD that sent it plunging to a low of 0.6840 came as a surprise. The price action upon opening this morning remains weak and from here, AUD could weaken further to 0.6770. In view of the severely oversold conditions, the next support at 0.6730 is unlikely to come into the picture. Resistance is at 0.6860 followed by 0.6900.”

Next 1-3 weeks: “We highlighted yesterday (11 Jun, spot at 0.6980) that ‘conditions remain severely overbought and we are not convinced that AUD has started its next up-leg within a positive phase’. We added, AUD ‘could trade between 0.6820 and 0.7100 for a period’. That said, the sharp and swift manner by which AUD is approaching 0.6820 suggests that Wednesday’s (10 Jun) high of 0.7067 could be a more significant top than anticipated. In other words, the current weakness in AUD is viewed as a corrective pull-back that has scope to extend to 0.6730, even as low as 0.6680. On the upside, only a move above 0.6950 would indicate that pull-back has stabilized. On a shorter-term note, 0.6900 is already a strong level.”

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