In opinion of FX Strategists at UOB Group, further downside in AUD/USD is seen facing decent support in the 0.7670 area in the short-term.
Key Quotes
24-hour view: “The outsized drop in AUD that sent it to a low of 0.7693 came as a surprise (we were expecting AUD to test 0.7800). The sharp bounce from the low amid oversold conditions suggests further AUD weakness is unlikely. For today, AUD is more likely to consolidate and trade between 0.7720 and 0.7820.”
Next 1-3 weeks: “Last Friday (26 Feb, spot at 0.7850), we highlighted that ‘the near-term bias for AUD is titled to the downside but for now, any weakness is viewed as part of a 0.7750/0.7950 range’. We did not anticipate the subsequent sharp sell-off that sent AUD to a low of 0.7693. Despite the sharp bounce from the low, the risk for AUD is still on the downside. That said, any weakness is expected to encounter solid support at 0.7670. On the upside, a break of the ‘strong resistance’ at 0.7880 would indicate the current downside risk has dissipated.”
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