Further weakness in AUD/USD seems unlikely – UOB

In light of the recent price action around the Aussie Dollar, odds for extra consolidation have increased, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Last Friday, we were of the view “there is scope for AUD to move higher but a sustained break of the strong 0.6775 resistance is unlikely”. AUD subsequently rose to 0.6774 before ending the day on a firm note at 0.6770 (+0.42%). While the advance appears to be ‘tiring’, it is too early to expect a sustained pullback. AUD is more likely to consolidate its gains and trade sideways to slightly higher from here. Expected range for today, 0.6740/0.6780″.

Next 1-3 weeks: “We highlighted last Friday (04 Oct, spot at 0.6745) that the “odds for further AUD weakness have diminished”. AUD subsequently rose to within one pip of the 0.6775 ‘key resistance’ at it touched 0.6774 during late NY hours. While the ‘key resistance’ is still intact, the price action is enough to indicate that the weak phase that started in mid-Sep has stabilized. However, it is too early to expect a sustained recovery and AUD is more likely to trade sideways within a 0.6705/0.6805 range for now”.