AUD/USD could have charted an interim top, although chances for extra gains remain if 0.7455 is cleared in the very near-term, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “Our expectation for AUD to trade with a ‘downside bias’ did not materialize as it traded within a relatively narrow range between 0.7400 and 0.7435. The underlying tone still appears to be a tad soft but any weakness is expected to encounter strong support at 0.7365. Resistance is at 0.7435 followed by a rather strong level at 0.7455.”
Next 1-3 weeks: “We noted yesterday (07 Dec, spot at 0.7430) that ‘upward momentum has slowed somewhat but there is still chance for AUD to move above 0.7455’. AUD subsequently dropped to 0.7374 before snapping back to within a few pips of 0.7455 (overnight high of 0.7453). Momentum has deteriorated further and this coupled with the failure to break clearly above the major resistance at 0.7455 has increased the risk of a short-term top. Unless AUD can ‘punch’ above 0.7455 within these 1 to 2 days, a break of 0.7365 (no change in ‘strong support’ level) would not be surprising and would indicate that the positive phase that started about 3 weeks ago has run its course.”
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