The downward pressure in AUD/USD seems to have lost impulse, in opinion of FX Strategists at UOB Group.
Key Quotes
24-hour view: “Our view for AUD yesterday was that ‘a break of the major support at 0.7625 would not be surprising but AUD is unlikely able to maintain a foothold below the next support at 0.7600’. While AUD subsequently breached 0.7625 and dropped to 0.7621, the swift bounce from the low came as a surprise (high has been 0.7726). The rapid rebound appears to be overdone and further sustained advance in AUD is unlikely. AUD is more likely to consolidate and trade within a 0.7660/0.7740 range.”
Next 1-3 weeks: “Yesterday (09 Mar, spot at 0.7645), we highlighted that ‘despite the slight improvement in momentum, a break of 0.7625 would not be surprising’. We added, ‘the next support is at the February’s low near 0.7565’. While AUD breached the 0.7625 level, it rebounded strongly after touching 0.7621. Downward momentum has waned and a break of 0.7740 (no change in ‘strong resistance’ level) would indicate that the current downside risk has dissipated. Barring a sudden surge in downward momentum within these 1 to 2 days, a break of 0.7740 would not be surprising.”
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