AUD/USD scope for a test of 0.7260 – UOB

The Aussie Dollar is expected to extend the up move and visit the 0.7260 region, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “The abrupt and explosive rally in AUD yesterday came as a surprise as it hit a 1-month high of 0.7213. The rally is unlikely to extend much further as AUD is more likely to consolidate its gains and trade sideways at these higher levels. Expected range for today; 0.7170/0.7240”.

Next 1-3 weeks: “While we indicated early yesterday (01 Nov, spot at 0.7085), “looking ahead, a break of 0.7140 would suggest the start of a recovery phase that could potentially extend to 0.7200”, the ‘sped-up’ price action that sent AUD surging to a high of 0.7213 within hours came as a surprise. After making a monstrous gain of +1.88% (NY close of 0.7207), there is scope for AUD to test the key and critical 0.7260 resistance. This level is the 8-1/2 month declining trend-line (not visible in the chart below) and a clear break of this resistance would indicate that last week’s 0.7021 low could turn out to be a significant mid to long-term bottom. Meanwhile, AUD is expected to stay underpinned in the coming days with 0.7110 acting as a ‘key support’.