FX Strategists at UOB Group noted AUD/USD could move higher and test the 0.6800 region and above in the next weeks.
24-hour view: “As cited in yesterday’s report, “momentum has yet to turn positive and further gains may stall at its key resistance at 0.6820.” AUD touched a high of 0.6809 before turning lower. The hesitant price action indicates that AUD is not ready for a bigger move either directions. With that, expect wide consolidation between 0.6725 and 0.6815 for today”.
Next 1-3 weeks: ““Our last narrative was from 31 Jul (spot at 0.6805) was that a ‘sustained push below 0.6800 could shift focus to 0.6715’. Since then, AUD struggled to recover despite oversold conditions and on Wed, AUD tumbled to fresh lows of 0.6678. At the same time, the v-shaped recovery that followed suggested that the last of AUD bulls may have capitulated. Directional indicators though still negative are gradually turning higher. From here, improving upside momentum suggests AUD to grind higher towards its resistance at 0.6800. It has to break the 0.6845 ‘key resistance’ in order to indicate that a mid-term low is in place at 0.6678. On the downside, we expect supports at 0.6715 and 0.6680”.
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