AUD/USD: A breach of 0.6410 looks unlikely – UOB

Occasional bearish attempts in AUD/USD are not ruled out, although a drop below 0.6410 is not favoured, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectation for the weakness in AUD to ‘extend to 0.6410’ was wrong as it rebounded strongly from 0.6432 to 0.6536 before dropping back down. While the rapid swings have resulted in a mixed outlook, the underlying tone still appears to be on the soft side. From here, we see chance for AUD to edge lower but it is unlikely to break the 0.6410 support. Resistance is at 0.6490 followed by 0.6520.”

Next 1-3 weeks: “Yesterday, we highlighted that upward momentum has eased and that AUD could test the month-to-date low at 0.6373. AUD subsequently popped above our 0.6520 ‘strong resistance’ (high of 0.6536) before dropping back quickly. While AUD could still edge lower, any weakness is unlikely to be ‘one-way’. In other words, the current movement is likely part of a broad 0.6370/0.6570 range.”