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The Aussie dollar is expected to trade in a 0.6730-0.6775 range in the very near-term, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “Expectation for the ‘corrective recovery in AUD to extend higher’ was incorrect as AUD dipped to a low 0.6735 before recovering. Momentum indicators are mostly neutral and the recent weakness in AUD appears to be stabilizing. In other words, we see limited downside risk and expect AUD to trade sideways for now, likely between 0.6730 and 0.6775.”

Next 1-3 weeks: “As highlighted, ‘further weakness in AUD is likely but severely oversold conditions suggest 0.6670 may not come into the picture’. AUD subsequently dipped to a 3-1/2 –month low of 0.6737 before recovering to end the day slightly higher at 0.6764 (+0.05%). The price action reinforces our view that severely oversold conditions may ‘limit’ the extent of any further decline in AUD. That said, AUD is not out of the woods just yet and only a move back above 0.6830 (no change in ‘strong resistance’ level) would indicate that the current weakness has stabilized.”