AUD/USD: Further gains seen above 0.7410 – UOB

In opinion of FX Strategists at UOB Group, AUD/USD could attempt a test of 0.7500 as long as 0.7410 holds the downside.

Key Quotes

24-hour view: “While we expected AUD to advance yesterday, we were of the view that ‘the major resistance at 0.7450 is unlikely to come into the picture’. The manner by which AUD blew past 0.7450 and surged 0.7486 came as a surprise. Deeply overbought conditions coupled with early signs of slowing momentum suggest that AUD is unlikely to strengthen much further. For today, AUD is more likely to trade between 0.7440 and 0.7490.”

Next 1-3 weeks: “We have expected AUD to strengthen for more than a week. In our latest narrative from last Friday (13 Oct, spot at 0.7415), we indicated that AUD could consolidate for a couple of days first before heading towards 0.7450. Our view was correct even though we did not quite expect the ease by which AUD blew past 0.7450 yesterday (high of 0.7486). Deeply overbought shorter-term conditions could lead to 1 to 2 days of consolidation again but as long as 0.7410 is not breached (‘strong support’ level previously at 0.7350), AUD is likely to tackle the next major resistance at 0.7500 (next resistance is at 0.7530).”