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In opinion of FX Strategists at UOB Group, the Aussie Dollar stays neutral in the short-term horizon, although a test of 0.7310 area appears unlikely for the time being.

Key Quotes

24-hour view: “The ‘target’ indicated at 0.7350 last Friday was not met as AUD rebounded from a low of 0.7370. While the recovery has room to extend higher, any advance is viewed as a higher 0.7380/0.7440 consolidation range and not the start of a sustained up-move”.

Next 1-3 weeks: “AUD staged a surprisingly sharp drop yesterday and the top of our previously expected 0.7360/0.7485 consolidation range was not ‘probed’. The quick drop from a high of 0.7463 suggests that the downside is more ‘sticky’ now even though lackluster momentum indicates that any weakness is unlikely to break below the year-to-date low near 0.7310 (at least not within the next couple of weeks). All in, we continue to hold a neutral stance and expect AUD to trade on soft note, likely within a 0.7310/0.7440 range”.