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Further decline in AUD/USD is expected although the key 0.6830 region should act as a strong contention, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Instead of trading sideways, AUD extended its losing streak and dropped to 0.6869 before ending the day on a soft note (NY close of 0.6873). The extended weakness is deep in oversold territory and further sustained decline appears unlikely. That said, it is too soon to expect a significant recovery. AUD is more likely to consolidate its loss and trade sideways to slightly lower from here. Expected range for today, 0.6855/0.6900″.

Next 1-3 weeks: “Our latest narrative was from Monday (29 Jul, spot at 0.6910) wherein AUD “could weaken further to 0.6870 but expect solid support near 0.6830″. AUD extended its losing streak as it touched 0.6869 yesterday (30 Jul) before closing lower for the 8 straight day. While the decline is overextended, there is still no sign of stabilization and AUD could weaken further in the coming days. That said, we continue to expect 0.6830 to offer solid support (in other words, the prospect for a sustained decline below this level is not high). On the upside, AUD has to break the 0.6945 ‘key resistance’ (level previously at 0.6975) in order to indicate that the weakness has stabilized”.