AUD/USD: Any advance is likely part of a higher range of 0.6230/0.6285 – UOB Group

Australian Dollar (AUD) could strengthen further vs US Dollar (USD); any advance is likely part of a higher range of 0.6230/0.6285. In the longer run, momentum is slowing, and the likelihood of further declines is diminishing; a breach of 0.6285 would indicate stabilisation, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. 

Likelihood of further declines is diminishing

24-HOUR VIEW: "Two days ago, we expected AUD to trade in a range. Yesterday, we indicated that 'the price action still appears to be part of a range trading phase,' and we expected AUD to 'trade between 0.6190 and 0.6250.' However, after dipping briefly to 0.6187, AUD soared, reaching a high of 0.6272. While further AUD strength seems likely today, given that momentum has not increased significantly, any advance is likely part of a higher range of 0.6230/0.6285. In other words, AUD is unlikely to break clearly above 0.6280." 

1-3 WEEKS VIEW: "We have maintained a negative AUD view since late last week. After AUD fell, in our latest narrative from Monday (03 Mar, spot at 0.6215), we highlighted that 'While declines still seem likely, AUD must break and remain below 0.6190 before a move to 0.6155 can be expected.' Yesterday, AUD dipped briefly to 0.6187 and then rebounded. Momentum is beginning to slow, and the likelihood of further declines is diminishing. However, only a breach of 0.6285 (no change in ‘strong resistance’ level from yesterday) would indicate that the weakness has stabilised."