In opinion of FX Strategists at UOB Group, AUD/USD is seen facing a tough barrier at the 0.7300 level in the next weeks.
Key Quotes
24-hour view: “Yesterday, we held the view that ‘upward momentum is slightly positive and AUD could retest the 0.7225 level before the current mild upward pressure should ease’. We added, ‘the major resistance at 0.7300 is not expected to come into the picture’. While the 0.7300 level was not breached (high of 0.7289), the rapid manner by which AUD propelled higher and the subsequent strong daily closing of +1.49% (0.7285) came as a surprise. The advance is severely overbought but AUD could try to crack 0.7300 first before a more sustained pull-back can be expected. For today, the next resistance at 0.7345 is unlikely to come under threat. Support is at 0.7220 followed by 0.7190.”
Next 1-3 weeks: “Two days ago (04 Nov, spot at 0.7130) we highlighted that ‘the outlook is mixed and AUD could trade in a choppy manner but is likely to stay between the two major levels of 0.6990 and 0.7300 for now’. While the major resistance at 0.7300 is still intact (overnight high of 0.7289), the strong surge in momentum (AUD closed higher by a whopping +1.49%) indicates that 0.7300 is unlikely able to hold the current advance in AUD. That said, there is another strong resistance at 0.7345 and only a clear break of this level would indicate AUD is ready to challenge the year-to-date top at 0.7413. Overall, AUD is likely to trade with an upward bias from here with 0.7140 acting as a ‘strong support’ level.”
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