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AUD/USD is now seen slipping back to the 0.7030 region in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we held the view that AUD ‘could test the support at 0.7060 first before a more sustained recovery can be expected’. AUD subsequently dropped to 0.7107 before staging a sharp and rapid recovery. Upward momentum is beginning to improve and the rebound in AUD could extend to 0.7200. For today, last Friday’s top at 0.7227 is not expected to come under threat. Support is at 0.7140 followed by 0.7120.”

Next 1-3 weeks: “The break of the ‘strong support’ at .0.7100 yesterday (03 Aug) indicates that the positive phase that started in mid-July has run its course. The price action was not unexpected as we indicated yesterday (03 Aug, spot at 0.7130) that “unless AUD moves and stays above 0.7180 within these 1 to 2 days, a breach of 0.7100 would not be surprising”. Last Friday’s (31 Jul) high at 0.7227 is viewed as a short-term top and unless AUD breaks this level, it is likely to drift lower over the next 1 to 2 weeks towards 0.7030.”