In opinion of FX Strategists at UOB Group, AUD/USD has now moved into a consolidative phase between 0.7640 and 0.7805.
Key Quotes
24-hour view: “AUD traded between 0.7729 and 0.7798 last Friday, narrower than our expected range of 0.7720 and 0.7805. While it closed at 0.7768, it weakened considerably after opening this morning. The rapid decline appears to be running ahead of itself and while the risk is on the downside, any weakness is unlikely to challenge the major support at 0.7640 (0.7680 is already quite a strong level). Resistance is at 0.7745 followed by 0.7780.”
Next 1-3 weeks: “We highlighted last Friday (08 Jan, spot 0.7770) that ‘upward momentum has been dented’ and we added, AUD ‘has to move and stay above 0.7805 or odds for a move to 0.7840 would diminish’. While our ‘strong support’ level at 0.7700 is still intact, the weak price actions after opening this morning suggests that the positive phase in AUD that started earlier last week (see annotations in the chart below) has run its course. For now, the current movement is viewed as part of a 0.7640/0.7805 range. Looking forward, a clear break of 0.7640 would indicate the start of a more sustained pull-back in AUD.”
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