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AUD/USD is now facing extra consolidation, likely between 0.7190 and 0.7360, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we highlighted that AUD ‘could dip below 0.7300 but any weakness is viewed as a lower trading range of 0.7275/0.7350’. We added, ‘a sustained decline below 0.7275 is not expected’. AUD subsequently dropped to a low of 0.7265 during NY hours before closing on a weak note at 0.7274 (-0.85%). Downward momentum has improved a fair bit and AUD is likely to weaken further towards the next support at 0.7235. For today, the next support at 0.7200 is likely out of reach. Resistance is at 0.7295 but only a break above 0.7315 would indicate the current downward pressure has eased.”

Next 1-3 weeks: “We highlighted yesterday (03 Sep, spot at 0.7320) that the ‘recent AUD strength has run its course’ and expected AUD to ‘consolidate and trade between 0.7220 and 0.7390’. While we continue to expect AUD to trade sideways for a period of time, the underlying tone has weakened and AUD is likely to trade within a lower range of 0.7190/0.7360.”

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