AUD/USD now shifts the attention to a probable breach of the 0.7640 level in the next weeks, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “The sharp sell-off in AUD last Friday came as a surprise. The rapid drop appears to be running ahead of itself but there is no sign of stabilization just yet. There is scope for the weakness in AUD to extend lower but oversold conditions suggest a sustained decline below 0.7660 is unlikely. Resistance is at 0.7720 followed by 0.7740.”
Next 1-3 weeks: “We have held a slightly positive view in AUD since last Wednesday (13 Jan, spot at 0.7765). We highlighted that ‘while upward momentum is building up, it appears tentative for now and AUD has to close above 0.7820 before a sustained advance can be expected’. We did not quite expect the sharp drop to 0.7682 last Friday. While our ‘strong support’ level at 0.7680 is still intact, upward momentum has dissipated. Downward pressure is beginning to build but AUD has to break 0.7640 before a deeper pull-back can be expected. The prospect for a break of 0.7640 is not high for now but would remain intact as long as the ‘strong resistance’ at 0.7765 is not breached.”
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