FX Strategists at UOB Group expect AUD/USD to keep navigating within a broad range for the time being.
24-hour view: “Instead of ‘trading sideways between 0.6500 and 0.6700’, AUD dropped to a low of 0.6463. Despite the relatively swift decline, downward momentum has not improved by much. For today, AUD could dip towards 0.6430 but any weakness is viewed as part of 0.6430/0.6560 range (a sustained decline below 0.6430 is unlikely).”
Next 1-3 weeks: “AUD traversed a huge distance within a very short span of time as it staged in a what appears to be a ‘flash crash’. AUD dived to 0.6312 early yesterday before bungeed back up and moved above the ‘strong resistance’ level of 0.6650 (overnight high of 0.6686). The 374 pips range registered yesterday is the largest 1-day range since Nov 2011. While the volatile price action has distorted the technical outlook, it does seem to suggest that the 0.6312 could hold from here, at least for a couple of weeks. Meanwhile, AUD could continue to trade in a volatile manner within a broad 0.6400/0.6750 range.”