AUD/USD: Further declines in AUD still appear likely – UOB Group

While Australian Dollar (AUD) is expected to edge lower, it does not appear to have enough momentum to reach the 0.6443 low seen earlier this week. In the longer run, further declines in AUD still appear likely; the next level to watch is 0.6440, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Not enough momentum to reach the 0.6443 low

24-HOUR VIEW: "We expected AUD to 'range-trade between 0.6480 and 0.6530' yesterday. The subsequent price movements did not quite turn out as expected, as AUD dropped to a low of 0.6472. Given the slight increase in downward momentum, we expect AUD to edge lower today. However, it does not appear to have enough momentum to reach the 0.6443 low seen earlier this week. Note that there is another support at 0.6460. Resistance is at 0.6495; a break above 0.6515 would indicate that the current mild downward pressure has faded."

1-3 WEEKS VIEW: "In our most recent narrative from Monday (13 Oct, spot at 0.6500), indicated that “further declines in AUD still appear likely, and the next level to watch is 0.6440.” After AUD subsequently dropped to a low of 0.6443 and then rebounded, we highlighted the following yesterday: 'Despite the relatively sharp decline, there has been no clear increase in downward momentum. That said, as long as 0.6545 (‘strong resistance’ level) holds, there is still a chance for AUD to test 0.6440.' We continue to hold the same view, but the ‘strong resistance is now at 0.6530 instead of 0.6545."