In opinion of FX Strategists at UOB Group, AUD/USD does not rule out further gains, although a move above 0.6646 is losing momentum.
24-hour view: “We held the view yesterday that AUD ‘is likely to take a breather’ after its recent strong advance and expected AUD to ‘trade between 0.6540 and 0.6600’. Our expectation was not incorrect as AUD subsequently traded between 0.6549 and 0.6601, narrower than our expected range. The current movement is still viewed as an on-going consolidation phase. In other words, AUD is expected to continue to trade sideways for today, likely between 0.6530 and 0.6590.”
Next 1-3 weeks: “We highlighted two days ago (19 May, spot at 0.6535) that the outlook for AUD is mildly positive and that it has to close above 0.6600 before a sustained advance can be expected. AUD briefly moved to a high of 0.6617 yesterday before retreating quickly to close just below 0.6600 (0.6595, +0.93%). While the daily closing is not as strong as preferred, further AUD strength would not be surprising. That said, the prospect for a sustained rise above 0.6645 is not high (next resistance is at 0.6670). Meanwhile, overbought short-term conditions could lead to a couple of days of consolidation first but the outlook for AUD is deemed as positive as long as 0.6500 is not taken out (‘strong support’ level was at 0.6465 yesterday).”
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