In opinion of FX Strategists at UOB Group, the current recovery in the Aussie Dollar should have further legs.
Key Quotes
24-hour view: “The anticipated AUD strength exceeded our expectation as it took out the strong 0.7265 resistance (overnight high of 0.7276). The strong advance is running ahead of ahead and we do not anticipate further AUD strength for today. However, it is too early to expect a significant pullback as AUD is more likely to consolidate its gains and trade sideways at these higher levels. Expected range for today, 0.7220/0.7280″.
Next 1-3 weeks: “The price action in AUD since we turned neutral last Thursday (13 Sep, spot at 0.7170) has been more robust than anticipated. However, it is premature to expect the start of a major bullish reversal. That said, short-term momentum has improved considerably and from here, a clear break above 0.7280 would suggest the current recovery in AUD could extend higher towards 0.7360. Only a break below 0.7195 would indicate that the current short-term upward pressure has eased”.
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