In opinion of FX Strategists at UOB Group , a break above 0.6950 in AUD/USD is expected to mitigate the ongoing bearish pressure.
24-hour view: “Price action in AUD overnight was more subdued than thought, in a tight 0.6885/0.6909 range. Upside momentum has fizzled out and the AUD is probably stuck in a range-bound trade for now. Look for 0.6920 to cap while supports are at 0.6890 followed by 0.6875. A break below 0.6875 may also open up 0.6850 though the latter is unlikely to be materially challenged at this juncture.”
Next 1-3 weeks: “The major support at 0.6820 held as expected, with AUD only getting as low as 0.6850 in the past 3 sessions. Although AUD has recovered to about 0.6900 currently, upside momentum remains remain modest at best. As before, we maintain that ‘only a move back above 0.6950 would indicate the current weakness has stabilized’ and it is probably too early to tell that AUD is out of the woods. On the downside, look for supports at 0.6850 and 0.6820 and if AUD was to register a NY closing below 0.6820, it would indicate that the late December high of 0.7032 is a more significant top than currently expected.”
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