The Aussie dollar could debilitate further and re-visit the mid-0.6800s vs. the greenback in the next weeks, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “We highlighted last Friday that AUD ‘could edge lower towards 0.6875’ and added ‘the next support at 0.6850 is likely ‘safe’. AUD subsequently dropped to 0.6871 before ending the day on a soft note at 0.6874. Downward momentum has picked up, albeit not by much. From here, barring a move back above 0.6910 (minor resistance at 0.6895), AUD could drift lower towards 0.6850. For today, a sustained drop below this level appears unlikely.”
Next 1-3 weeks: “After closing within 5 pips of 0.6900 for 5 days in a row, AUD dropped sharply last Friday and closed at 0.6874 (-0.34%). The price action gave the waning downward momentum a boost and from here, AUD could move below the month-to-date low of 0.6849 (we highlighted last Friday that a break of 0.6849 is not ruled out just yet). However, there is another strong support at 0.6820 and for now, the prospect of a breach of this level is not high. On the upside, only a move above 0.6935 (‘strong resistance’ level was at 0.6950 last Friday) would indicate that a short-term bottom is in place.”
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