AUD/USD: Any advance may not reach 0.6625. – UOB Group
Australian Dollar (AUD) could continue to rise against US Dollar (USD); deeply overbought conditions suggest any advance may not reach 0.6625. In the longer run, rapid increase in momentum is likely to lead to further AUD advance to 0.6625, potentially reaching 0.6645, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Rapid increase in momentum is likely to lead to further AUD advance
24-HOUR VIEW: "When AUD was at 0.6550 yesterday, we noted that 'momentum is increasing, albeit not by much.' While we expected AUD to 'edge higher,' we were of the view that 'any advance is unlikely to reach 0.6575.' Our directional call was correct, but we did not expect the sudden upward acceleration as AUD soared above 0.6575 and broke a significant resistance at 0.6595 (high of 0.6603). While AUD could continue to rise today, deeply overbought conditions suggest any advance may not reach 0.6625. On the downside, any pullback is likely to hold above 0.6565, with minor support at 0.6585."
1-3 WEEKS VIEW: "Yesterday (23 Jul, spot at 0.6550), we highlighted that 'there has been a slight increase in upward momentum.' We added, AUD 'could edge higher toward 0.6575.' We pointed out that 'to maintain the momentum, AUD must hold above 0.6505.' However, instead of edging higher, AUD surged and reached a high of 0.6603. The rapid increase in momentum is likely to lead to further advance to 0.6625, potentially reaching 0.6645. On the downside, the ‘strong support’ level is now at 0.6530 instead of 0.6505."
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FXStreet Insights Team
FXStreet
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