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AUD/USD could extend the side-lined theme between 0.7080 and 0.7230 in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we noted that ‘downward momentum has more or less dissipated’ and expected AUD to ‘trade within a 0.7110/0.7160 range’. However, AUD edged to a high of 0.7170 (low has been 0.7124) before settling on a firm note at 0.7168 (+0.38%). The underlying tone has improved and AUD could grind higher but any advance is unlikely to move beyond the major resistance at 0.7230 (0.7200 is already a strong level). Overall, the current mild upward pressure is deemed as intact unless AUD moves below 0.7130 (minor support is at 0.7150).”

Next 1-3 weeks: “Two days ago (07 Oct, spot at 0.7110), we held the view that “the risk for AUD is titled to the downside towards 0.7050”. Since then, AUD has rebounded and while our ‘strong resistance’ level at 0.7185 is still intact, downward momentum has more or less dissipated. The current movement is viewed as part of a consolidation phase and from here, AUD could trade between 0.7080 and 0.7230 for a period of time.”