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In light of the recent price action, AUD/USD could have now moved into a consolidative pattern, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected AUD to trade at a “lower trading range of 0.6705/0.6755″ yesterday. AUD subsequently rose to 0.6757 before dropping back down to 0.6723 during NY hours. We continue to detect a soft underlying tone and AUD is likely to trade on the defensive for today. From here, barring a move above 0.6755, AUD is expected to drift lower to 0.6705. At this stage, a sustained decline below this level is unlikely (next support at 0.6690)”.

Next 1-3 weeks: “AUD traded in a narrow range and ended the day largely unchanged at 0.6728 (-0.03%). The price action offers no fresh clues and we continue to hold the same view from Monday (07 Oct, spot at 0.6760) wherein AUD is expected to “trade sideways for now”. In other words, AUD is likely to continue to trade between 0.6705 and 0.6805 for a while more. Looking ahead, the downside risk appears to be greater but only a NY closing below 0.6690 would suggest AUD is ready to move below the year-to-date low of 0.6670″.