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The outlook on AUD/USD remains positive and still faces a tough resistance in the 0.73 zone, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “AUD rose to a high of 0.7240 yesterday before ending the day on a firm note at 0.7238 (+0.63%) and our expectation that ‘there is scope for AUD to test 0.7255 first’ did not materialize. While upward momentum has not improved by much, we continue to ee chance for AUD to edge higher but any advance is viewed as part of a 0.7195/0.7265 range (a sustained advance above 0.72665 is not expected).”

Next 1-3 weeks: “We highlighted on Tuesday (04 Aug, spot at 0.7110) that ‘a short-term top is in place’ and we expected AUD to ‘drift lower towards 0.7030’. AUD dropped to 0.7077 and the subsequent rapid rebound from the low that moved above the previous top at 0.7227 yesterday was not exactly expected. While momentum has ticked up, conditions remain overbought. From here, further AUD strength is not ruled out but any advance is likely to be slow-going and the next resistance at 0.7300 is likely out of reach. Overall, the outlook for AUD is deemed as mildly positive as long as it stays above the ‘strong support’ at 0.7120.”