AUD/USD can drop below 0.6370 – UOB Group

FXStreet Insights Team FXStreet

Australian Dollar (AUD) could drop below 0.6370 against the US Dollar (USD) but might not be able to maintain a foothold below this level. In the longer run, AUD must break and hold below 0.6370 before a move to 0.6330 can be expected, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Below 0.6370, a move to 0.6330 can be expected

24-HOUR VIEW: "AUD fell sharply on Tuesday. Yesterday, Wednesday, we indicated that 'the decline appears overextended, and rather than sustaining its downward momentum, AUD is more likely to trade in a lower range of 0.6400/0.6470.' AUD then traded between 0.6396 and 0.6464. Downward momentum is building, and today, we expect AUD to weaken toward 0.6370. A break below this level is not ruled out, but oversold conditions indicate that AUD might not be able to maintain a foothold below this level. The next support at 0.6330 is unlikely to come under threat. Resistance levels are at 0.6420 and 0.6440."

1-3 WEEKS VIEW: "We highlighted yesterday (08 May, spot at 0.6430) that AUD 'appears to have entered a consolidation phase, and for the time being, it is likely to trade between 0.6370 and 0.6515.' AUD then fell to 0.6396, closing at 0.6401, lower by 0.37%. The slight increase in momentum is not enough to suggest a sustained decline just yet. AUD must break and hold below 0.6370 before a move to 0.6330 can be expected. The likelihood of AUD breaking clearly below 0.6370 will remain intact as long as 0.6460 is not breached in the next few days."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD eases to near 1.1650, eyes US PCE for fresh impetus

EUR/USD turns south to test 1.1650 in European trading on Friday, facing rejection once again near seven-week highs. The pair, however, continues to draw support from persistent US Dollar selling bias, despite a cautious market mood. Traders now await the US September PCE inflation and UoM Consumer Sentiment data.

GBP/USD holds gains near 1.3350 ahead of US data

GBP/USD sticks to a positive bias near 1.3350 in the European session on Friday. Traders prefer to wait on the sidelines ahead of the key US inflation and sentiment data due later in the day. In the meantime, broad-based US Dollar weakness helps the pair stay afloat.

Gold remains below $4,250 barrier as traders await US PCE data for directional impetus

Gold gains some positive traction on Friday, though it remains confined in the weekly range. Dovish Fed expectations continue to undermine the USD and lend support to the commodity. Bulls, however, might opt to wait for the US PCE Price Index before placing aggressive bets.

UoM Consumer Sentiment Index expected to post a mild recovery in December

December’s preliminary Michigan Consumer Sentiment Index is forecast to have picked up to 52 from a three-year low of 51.0 in November. A stalled labour market and higher price pressures are likely to weigh on consumers’ confidence.

Canada Unemployment Rate expected to edge higher in November ahead of BoC rate decision

Statistics Canada will release its Labour Force Survey on Friday, and markets are bracing for a weak print. The Unemployment Rate is expected to tick higher to 7% in November, while the Employment Change is forecast to come in flat after a nice gain in October.

Pi Network Price Forecast: Bearish streak nears critical support trendline

Pi Network (PI) edges lower on Friday for the third consecutive day, approaching a local support trendline. The on-chain data suggests an increase in supply pressure as Centralized Exchanges (CEXs) experience a surge in inflows.