AUD/USD: Extra consolidation stays on the cards – UOB

AUD/USD has likely moved into a consolidative phase between 0.7050/0.7250, suggested FX Strategists at UOB Group.

Key Quotes

24-our view: “Yesterday, we held the view that AUD ‘could drift lower towards 0.7125’. However, rose briefly to a high of 0.7190 before dropping back to 0.7135 during late NY session. The underlying tone still appears to be soft and we continue to see chance for AUD to test the 0.7125 support. However, in view of the lackluster momentum, the next support at 0.7095 is not expected to come into the picture. On the upside, only a move above 0.7190 would indicate the current mild downward pressure has eased (minor resistance is at 0.7170).”

Next 1-3 weeks: “In our latest narrative for AUD from last Thursday (06 Aug, spot at 0.7105), we held the view that ‘the outlook for AUD is mildly positive and that the major resistance at 0.7300 is likely out of reach’. AUD subsequently eked out a fresh high of 0.7242 on Friday before dropping sharply. The mild upward pressure has more or less dissipated and from here, AUD is deemed to have moved into a consolidation phase. For the next couple of weeks, AUD is expected to trade between 0.7050 and 0.7250.”