The breakdown of 0.6400 could motivate AUD/USD to extend the decline to the 0.6360 region in the near term, comment FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.
24-hour view: “Yesterday, we expected AUD to ‘trade between 0.6435 and 0.6520’. AUD subsequently rose to 0.6513 before dropping to 0.6414. While the decline lacks momentum, there is room for AUD to dip to 0.6400 first before the risk of a rebound would increase. For today, the next support at 0.6360 is not expected to come under threat. On the upside, a break of 0.6495 (minor resistance is at 0.6470) would indicate that the current downward pressure has eased.”
Next 1-3 weeks: “We continue to hold the same view from Monday (26 Sep, spot at 0.6500) that AUD is likely to continue to weaken and the next level to watch is at 0.6400. Overall, only a breach of the ‘strong resistance’ level at 0.6555 (level was at 0.6600 yesterday) would indicate that the weakness in AUD that started 2 weeks ago (see annotations in the chart below) has stabilized. Looking ahead, the next support below 0.6400 is at 0.6360.”
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