FX Strategists at UOB Group do not rule out the continuation of the rebound in AUD/USD, although the mid-0.6800s looks a tough barrier so far.
Key Quotes
24-hour view: “Our view for AUD last Friday was that “the rapid decline is severely over-extended and further sustained weakness is not expected for today”. However, instead of consolidating, AUD rebounded strongly and closed right at the high of 0.6822 (+0.54%). While the rebound appears to be running ahead of itself, there is scope to for AUD to extend its advance. That said, the strong 0.6845 resistance could be just out of reach. Support is at 0.6800 but the stronger level is at 0.6785″.
Next 1-3 weeks: “We held the view yesterday (14 Nov, spot at 0.6810) that the “risk is on the downside but any weakness is likely limited to 0.6765″. AUD subsequently extended its decline and plummeted to 0.6770. While the price action has resulted in a rapid improvement in momentum, longer-term conditions are still rather oversold and the prospect for a sustained decline below 0.6765 is still not that high. That said, AUD is expected to remain on the back foot unless it can move back above 0.6845
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