AUD/USD has likely moved into a consolidation phase – UOB

AUD/USD is now seen navigating within the 0.7660-0.7800 range in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “While we expected AUD to strengthen yesterday, we were of the view that ‘the next major resistance at 0.7820 is likely out of reach’. Our view was not wrong as AUD rose to 0.7816. However, we did not anticipate the subsequent sharp and swift sell-off from the high (AUD plummeted to 0.7709 during NY hours). The rapid drop appears to overdone but there is room for AUD to test the major support at 0.7700. For today, a sustained decline below this level is unlikely (next support is at 0.7660). Resistance is at 0.7755 followed by 0.7780.”

Next 1-3 weeks: “Yesterday (20 Apr, spot at 0.7770), we noted that ‘the outlook for AUD is positive and the next resistance is at 0.7820’. AUD rose subsequently and came within a few pips of 0.7820 (high of 0.7816). That said, we did not expect the sharp sell-off from the high as AUD plummeted to an overnight low of 0.7709. While our ‘strong support’ level at 0.7700 is still intact, the rapid loss in momentum indicates that the positive phase in AUD has run its course. The current movement is viewed as the early stages of a consolidation phase and AUD is expected to trade between 0.7660 and 0.7800 for now.”