In opinion of FX Strategists at UOB Group, a drop to 0.7450 in AUD/USD seems to have lost some momentum as of late.
24-hour view: “We highlighted yesterday that ‘there is scope for the rebound in AUD to edge above 0.7555’. We added, ‘the next resistance at 0.7580 is not expected to come into the picture’. Our view was not wrong as AUD rose to 0.7564 during NY session. While the advance appears to be struggling to maintain its momentum, AUD could test 0.7580 before pulling back. The strong resistance at 0.7600 is not expected to come under threat. On the downside, a breach of 0.7510 (minor support is at 0.7530) would indicate that the upward pressure has eased.”
Next 1-3 weeks: “We have held a negative view in AUD for more than a week now. After AUD plunged to 0.7478 last Friday, we indicated on Monday (21 Jun, spot at 0.7510) that ‘the next level to focus on is at 0.7450 but oversold conditions could lead to a couple of days of consolidation first’. While there is no change in our view, downward momentum is beginning to wane and the prospect for AUD to weaken to 0.7450 has diminished. However, only a break of 0.7600 (no change in ‘strong resistance’ level) would indicate that the weak phase in AUD has come to an end.”
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