FX Strategists at UOB Group stay neutral on the Aussie Dollar, which is likely to trade within a consolidative theme in the near term.
Key Quotes
24-hour view: “We highlighted last Friday that a “short-term top could be in place” but added the anticipated pull-back could be “limited to a test of the 0.7150/55 level”. In line with expectation, AUD well held below the Thursday’s peak near 0.7230 (Friday’s high of 0.7216) and dropped to a low of 0.7151 during NY hours. While the downward momentum is not strong, there is scope for AUD to test the next support at 0.7120 before the current soft patch should stabilize (next support is at 0.7100). Resistance is at 0.7175 followed by 0.7200. The 0.7216 high is not expected to come into the picture”.
Next 1-3 weeks: “We just shifted from a bearish to neutral stance yesterday (13 Sep) and there is no change to the view. As highlighted, the current movement is viewed as the early stages of a consolidation/correction phase. From a short-term perspective, the rebound could extend higher but any AUD strength is view as part of a 0.7100/0.7240 consolidation range and not the start of a sustained up-move”.
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