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In opinion of FX Strategists at UOB Group, AUD/USD could recede further and re-test the mid-0.6200s in the next weeks.

Key Quotes

24-hour view: “After rising strongly for most of last week, AUD staged a surprisingly sharp and rapid decline that sent it tumbling to a low of 0.6410 last Friday (before extending its drop upon opening this morning). The rapid drop is severely oversold even though robust downward momentum suggests AUD could test 0.6360 first before the current downward pressure should ease. For today, the next support at 0.6330 is likely out of reach. Resistance is at 0.6425 followed by 0.6465.”

Next 1-3 weeks: “In our latest narrative from last Wednesday (29 Apr, spot at 0.500), we held the view that AUD could ‘strengthen towards 0.6580’. AUD subsequently rose to 0.6570 on Thursday (30 Apr) before dropping sharply. The rapid decline suggests that AUD may have found a short-term top at 0.6570. From here, the pullback has scope to extend lower towards 0.6300, possibly as low as 0.6250. Only a move back above 0.6520 (‘strong resistance’ level) would indicate that the current downward pressure has eased.”