AUD/USD: Bulls strive to test 0.6660 – UOB Group
|Strong momentum is likely to lead to further Australian Dollar (AUD) strength; it remains to be seen if it can break above 0.6660, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.
Closest resistance is at 0.6660
24-HOUR VIEW: “Yesterday, we expected AUD to trade in a sideways range of 0.6560/0.6600. Our expectation was incorrect. Instead of trading sideways, AUD soared, closing sharply higher by 0.74% (0.6634). While conditions are overbought, strong momentum is likely to lead to further AUD strength. However, it remains to be seen if it can break above 0.6660. Support is at 0.6615; a breach of 0.6600 would indicate that AUD is not strengthening further.”
1-3 WEEKS VIEW: “Two days ago (12 Aug, spot at 0.6570), we indicated that ‘there has been a slight increase in momentum, but not sufficiently enough to suggest the start of a sustained advance.’ We were of the view that that AUD ‘must break and remain above 0.6600 before further advance can be expected.’ We were also of the view that ‘the chance of AUD breaking clearly above 0.6600 will increase in the next few days provided that 0.6520 (‘strong support’ level) is not breached’ and that ‘if AUD breaks clearly above 0.6600, the next level to watch is 0.6660.’ Yesterday, AUD not only broke clearly above 0.6600, but it also soared further, reaching a high of 0.6638. Upward momentum has increased further, and as mentioned two days ago, the level to focus on is 0.6660. Looking ahead, the next resistance above 0.6660 is a significant level at 0.6700. On the downside, the ‘strong support’ level has moved higher to 0.6580 from 0.6520.”
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