In view of FX Strategists at UOB Group, the bearish momentum around the Aussie Dollar could prompt spot to recede towards the 0.7400 zone.
Key Quotes
24-hour view: “While we noted yesterday that “downward momentum has ticked higher”, the sudden lurch lower in AUD that hit an overnight low of 0.7448 was not expected. Downward momentum has improved considerably and further AUD weakness seems likely. That said, we do not expect last week’s 0.7413 low to come into the picture for now (0.7440 is already quite a strong support). On the upside, only a move back above 0.7520 would indicate that the current downward pressure has eased (minor resistance is at 0.7500)”.
Next 1-3 weeks: “AUD touched an overnight low of 0.7448, just above the bottom of our expected 0.7440/0.7600 consolidation range. While there is no change to our neutral view, downward momentum has picked up and this could lead to a probe of the major 0.7400 support. At this stage, we do not anticipate a sustained move below this level. Only a move back above the ‘key resistance’ at 0.7540 would indicate that the current mild downward pressure has eased”.
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