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AUD/USD is likely to trade within the 0.7700-0.7830 range in the next weeks, noted UOB Group’s FX Strategists.

Key Quotes

24-hour view: “While we expected AUD to strengthen yesterday, we held the view that ‘the strong resistance at 0.7770 is unlikely to come under threat’. Our view was not wrong even though AUD came close to taking out 0.7770 (NY high of 0.7769). Upward momentum has improved and AUD has scope to advance but the major resistance at 0.7795 is likely out of reach (0.7780 is already quite a strong resistance). Support is at 0.7745 followed by 0.7730.”

Next 1-3 weeks: “Our latest narrative was from Monday (31 May, spot at 0.7715) where we indicated that ‘downside risk has increased further but AUD has to close below 0.7680 before a sustained decline can be expected’. We added, ‘the prospect for a sustained decline is not high but it would remain intact unless AUD breaks the ‘strong resistance’ level at 0.7770 within these few days’. AUD rebounded to a high of 0.7769 yesterday (01 Jun) and the build-up in downward momentum has fizzled out. The current movement is viewed as part of a consolidation and AUD is likely to trade between 0.7700 and 0.7830.”