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AUD/USD is likely to trend downwards in the next weeks, in opinion of FX Strategists at UOB Group.

Key Quotes

24-hour view: “Last Friday, we expected a lower AUD but we were of the view that ‘the prospect for weakness to extend to 0.7670 is not high’. The subsequent sharp but short-lived drop to 0.7624 came as a surprise. The swift and sharp bounce from the low has scope to extend but is not expected to break the solid resistance at 0.7760 (minor resistance is at 0.7730). Support is at 0.7675 followed by 0.7645. The 0.7624 low is not expected to come into the picture.”

Next 1-3 weeks: “We highlighted last Friday (05 Mar, spot at 0.7720) that AUD ‘is likely to trade with a downward bias towards 0.7670’. We added, ‘looking forward, the next support below 0.7670 is at 0.7630’. While our view for AUD to move lower was not wrong, we did not anticipate the sharp but short-lived drop to 0.7624 and the subsequent strong bounce from the low. The price actions have clouded the outlook somewhat but the overall reading still points to a lower AUD. That said, it may take a while before AUD revisits the 0.7625 level. On the upside, a break of 0.7800 (no change in ‘strong resistance’ level) would indicate the current downside risk has dissipated.”