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Further decline in AUD/USD remains well on the cards, likely to sub-0.6820 levels according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our view of a ‘slight downside bias’ towards 0.6815 largely panned out yesterday with AUD eking out a low of 0.6829. That said, indicators are mixed and a sideways pattern looks more likely rather than further declines. On the downside, look for 0.6820 to support while rallies are limited to 0.6865.”

Next 1-3 weeks: “While AUD breached 0.6849 yesterday (21 Jan), the price action lacks ‘spark’ and downward momentum has not improved by much. That said, the odds for AUD to move below 0.6820 have increased even though there is another solid support at 0.6790. Taking a step back, we have viewed the price action in AUD since early as ‘part of a corrective pullback and not a major reversal’. The pullback appears to be over-extended and for now, a clear break of 0.6790 would come as a surprise. All in, AUD is expected to stay on the back foot unless it can reclaim 0.6900 (‘strong resistance’ level was at 0.6935 previously).”