Occasional dips in the Aussie Dollar should meet solid support in the 0.7200 neighbourhood, according to FX Strategists at UOB Group.
Key Quotes
24-hour view: “Expectation for sideway trading yesterday was clearly wrong as AUD plunged and hit an overnight low of 0.7240. The subsequent weak daily closing (NY close of 0.7249) suggests pressure is firmly on the downside. From here, barring a move above 0.7300 (minor resistance is at 0.7275), we expect AUD to extend its decline below the overnight low even though last week’s bottom near 0.7200 is unlikely to break so easily”.
Next 1-3 weeks: “AUD plunged by -1.39% yesterday (NY close of 0.7250) and the outsized decline was clearly unexpected. Despite the sharp drop, we are not ready to adopt a bearish stance just yet as we expect last week’s bottom near 0.7200 to offer solid support. Only a clear break of this level would indicate that AUD is ready to tackle the major long-term 0.7145/65 support zone. That said, the near-term bias is on the downside and only a break of 0.7330 (‘key resistance’) would indicate that the current weakness in AUD has stabilized”.
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