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Further upside to the 0.7800 area in AUD/USD is now likely, according to FX Strategists at UOB Group.

Key Quotes

24-hoour view: “Yesterday, we held the view that AUD is likely to ‘trade sideways between 0.7640 and 0.7720’. However, AUD surged to 0.7778 before closing on a strong note at 0.7760. Further AUD strength appears likely but overbought conditions suggest that a sustained rise beyond 0.7800 is unlikely. Support is at 0.7730 followed by 0.7700.”

Next 1-3 weeks: “We highlighted yesterday (05 Jan, spot at 0.7670) that we continue to hold same view wherein ‘there is room for AUD to advance but the major resistance at 0.7760 is unlikely to come into the picture so soon’. However, we did not quite anticipate the sudden surge in AUD that sent it to a high of 0.7778. Upward momentum has improved considerably and the next level to focus on is at 0.7800 followed by 0.7840. Overall, the current positive phase in AUD is deemed as intact as long as AUD does not move below 0.7670 (‘strong support’ level was at 0.7630 yesterday).”