Further upside in AUD/USD now seems to be losing momentum, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “We highlighted yesterday that ‘upward momentum has improved further and a break of 0.7795 would not be surprising’. We added, ‘a clear break of the next major resistance at 0.7820 appears unlikely’. While our view was not wrong, we did not anticipate the sharp and swift sell-off from 0.7805. The rapid overnight drop has picked up considerable momentum and AUD could extend lower to 0.7720. The next support at 0.7685 is unlikely to come into the picture. Resistance is at 0.7765 followed by 0.7790.”
Next 1-3 weeks: “We have held a positive view in AUD since early last week. Yesterday (16 Feb, spot at 0.7785), we highlighted that ‘outlook for AUD is still positive’ and ‘the next resistance above 0.7820 is at 0.7850’. AUD subsequently rose to 0.7805 before staging a sudden and sharp sell-off. Upward momentum has been waned quickly and the odds for further AUD strength have diminished considerably. From here, a break of 0.7720 (no change in ‘strong support’ level) would indicate that 0.7805 is the extent of the recent AUD strength. In view of the vastly weakened momentum, a break of 0.7720 would not be surprising.”
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