|

AUD/USD clings to the range bound theme – UOB

In the view of UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia, AUD/USD should maintain its current consolidative mood for the time being.

Key Quotes

24-hour view: Two days ago, AUD broke below a strong support at 0.6355 and dropped sharply to 0.6332. Yesterday, we indicated that “the sharp drop appears to be overdone, and AUD is unlikely to weaken much further.” We expected AUD to trade in a range between 0.6330 and 0.6390. Instead of trading in a range, AUD rebounded robustly to a high of 0.6432. The strong rebound could test 0.6455 before easing. The major resistance at 0.6480 is unlikely to come into view. Support is at 0.6405, followed by 0.6380. 

Next 1-3 weeks: After AUD broke below the strong support level of 0.6355 and reached a low of 0.6332, we highlighted yesterday (28 Sep, spot at 0.6355) that “while the price action suggests AUD is likely to weaken further, downward momentum is not that strong, and the support at 0.6280 is unlikely to be reached anytime soon.” We also highlighted that “AUD is likely to remain under pressure unless it breaks above the ‘strong resistance’ level, currently at 0.6430.” In NY trade, AUD rose to a high of 0.6432. The breach of the ‘strong resistance’ level has invalidated our view. Overall, AUD is still likely trading in a range, probably between 0.6360 and 0.6480. 

Author

Pablo Piovano

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

More from Pablo Piovano
Share:

Editor's Picks

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold treads water around $4,000

Gold prices maintain its offered stance in place at the end of the week, hovering around the key $4,000 threshold per troy ounce. The persistent selling bias in the precious metal comes amid decent gains in the US Dollar and an acceptable rebound in US Treasury yields across the curve, all alongside further upside traction in crude oil prices.

Crypto Today: Bitcoin holds the 50-day EMA as Ethereum and XRP face structural resistance

Bitcoin gradually ticks up on Friday, trading above $81,000. The Crypto King has recently defended structural support near $80,000, reinforcing the prevailing bullish outlook. Ethereum similarly edges higher above $2,400, while Ripple trades above $1.32 after testing support around $1.30.

The French bond panic is overdone. Here's what the market is misreading 

France's 10-year government bond yield has climbed above 5%, reigniting fears of a sovereign debt crisis in the Eurozone. With public debt exceeding €3.5 trillion, persistent budget deficits and a fragmented political landscape, investors are increasingly questioning the French government's ability to stabilize its finances.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.