Extra gains in AUD/USD are expected once 0.7820 is cleared, noted UOB Group’s FX Strategists.
24-hour view: “Our expectation for AUD to ‘trade sideways’ was incorrect as it surged to an overnight high of 0.7777. The strong advance could extend to 0.7800 but for today, last week’s peak at 0.7820 is unlikely to come under threat. Support is at 0.7735 but the stronger level is at 0.7705.”
Next 1-3 weeks: “We highlighted yesterday (12 Jan, spot at 0.7700) that AUD ‘is under mild downward pressure’ unless it ‘can move and stay above 0.7760 within these 1 to 2 days’. The sudden surge in AUD during NY hours that sent it to a high of 0.7777 came as a surprise. Downward pressure has dissipated and the risk has shifted to the upside. While upward momentum is building up, it appears tentative for now and AUD has to close above 0.7820 before a sustained advance can be expected (next resistance is at 0.7860). At this stage, the prospect for AUD to move clearly above 0.7820 is not high but it would remain intact as long as AUD does not move below 0.7680 (‘strong support’ level).”
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