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The Aussie Dollar is poised for further retracements although a break below 0.7310 seems unlikely in the near term, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “Expectation for AUD to break 0.7485 did not materialize as it slumped after touching a high of 0.7463. While downward momentum is not strong, the rapid drop has room to extend lower to 0.7350. In view of the lackluster momentum, we do expect the next support at 0.7310 to come into the picture. Resistance is at 0.7410 followed by 0.7440. The 0.7463 high is expected to be ‘safe’ for today”.

Next 1-3 weeks: “AUD staged a surprisingly sharp drop yesterday and the top of our previously expected 0.7360/0.7485 consolidation range was not ‘probed’. The quick drop from a high of 0.7463 suggests that the downside is more ‘sticky’ now even though lackluster momentum indicates that any weakness is unlikely to break below the year-to-date low near 0.7310 (at least not within the next couple of weeks). All in, we continue to hold a neutral stance and expect AUD to trade on soft note, likely within a 0.7310/0.7440 range”.