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In light of the recent performance, AUD/USD could now advance to the boundaries of the 0.67 level in the near-term, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectation for AUD to ‘trade sideways’ was incorrect as it briefly popped to a high of 0.6646. The sharp and rapid pull-back from the high suggests AUD is not ready to move higher on a sustained basis just yet. For today, AUD could continue to trade in a choppy manner, likely not moving much out of yesterday’s broad range of 0.6509/0.6646.”

Next 1-3 weeks: “After the outsized drop in AUD last Friday, we highlighted on Monday (02 Mar, spot at 0.6515) that the ‘price action resembles a ‘mini flash crash’ and while it is too early to expect the current weakness to stabilize, AUD may not be able to maintain a toe hold below the round number support of 0.6400 in the coming weeks’. AUD staged a surprising robust rebound yesterday (03 Mar) and moved above the ‘strong resistance’ at 0.6610 (overnight high of 0.6646). The weakness in AUD that started on 21 Feb has stabilized. The current movement is viewed as a recovery phase. From here, there is room for AUD to edge higher to 0.6695. At this stage, the prospect for a sustained rise beyond this level is not high. On the downside, 0.6495 is expected to be strong enough to hold any dip in AUD, at least for the next few days.”