According to FX Strategists at UOB Group, AUD/USD still faces prospects of extra gains in the near-term.
Key Quotes
24-hour view: “AUD edged below 0.6770 and eked out a fresh month-to-date low of 0.6768. Downward momentum has picked up albeit not by much. The bias is tilted to the downside but in view of the lackluster momentum, any decline is likely limited to a test of 0.6760. Resistance is at 0.6795 but the stronger level is at 0.6810″.
Next 1-3 weeks: “When AUD dropped sharply on 14 Nov (spot at 0.6810), we held the view that the “risk for AUD is on the downside but any weakness is likely limited to 0.6765″. AUD subsequently dropped to 0.6770 and for the past 1-1/2 weeks, it traded in a quiet manner and within the range registered on 14 Nov until yesterday (25 Nov) when it dipped a couple pips below 0.6770 (low of 0.6768). While the price action suggests the risk remains on the downside, momentum indicators are lackluster. In other words, any further AUD weakness is likely to be slow and grinding and the next support at 0.6735 may not come into the picture anytime soon. On the upside, only a move above 0.6825 would indicate the current mild downward pressure has eased”.
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