AUD/USD risks a deeper pullback on a close below 0.7680 in the next weeks, suggested FX Strategists at UOB Group.
24-hour view: “Our expectation for AUD to ‘trade between 0.7730 and 0.7770’ was incorrect as it plummeted to 0.7689 during NY hours last Friday. While oversold, the decline has scope to test 0.7680 first before stabilizing. For today, a sustained decline below this level is unlikely (next support is at 0.7645). Resistance is at 0.7720 but only a break of 0.7740 would indicate that the current weakness in AUD has stabilized.”
Next 1-3 weeks: “After trading in a quiet manner and within relatively narrow ranges for several days, the sudden expansion in range last Friday came as a surprise (AUD rose to 0.7776 before falling sharply to 0.7689). While downward momentum has improved, AUD has to close below 0.7680 before a move to 0.7645 can be expected. The prospect for AUD to close below 0.7680 appears to be quite high as long as it does not break the ‘strong resistance’ level at 0.7765 within these few days.”
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