AUD/USD: Increase in momentum indicates AUD can continue to decline – UOB Group

FXStreet Insights Team FXStreet

Australian Dollar (AUD) is likely to trade in a 0.6250/0.6300 range vs US Dollar (USD). In the longer run, increase in momentum indicates AUD could continue to decline, but it is too early to determine if it can reach 0.6185, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Unlikely to reach 0.6185

24-HOUR VIEW: "On Monday, AUD fell to a low of 0.6219. Yesterday, Tuesday, we highlighted that AUD 'could retest the 0.6220 level, but given the oversold conditions, any further decline is not expected to reach the major support at 0.6185.' However, AUD dipped less than expected to 0.6232 before rebounding sharply to close at 0.6279. The rapid rebound appears to be running ahead of itself, and AUD is unlikely to rise much further. Today, AUD is more likely to trade in a 0.6250/0.6300 range."

1-3 WEEKS VIEW: "Yesterday (01 Apr, spot at 0.6245), we highlighted, after the sharp drop on Monday, the increase in momentum indicates that AUD 'could continue to decline.' However, we pointed out, 'it is too early to determine if it can reach 0.6185.' We added, 'to sustain the buildup in momentum, AUD must remain below 0.6300.' We did not quite expect the subsequent strong rebound. From here, a clear break above 0.6300 would indicate that AUD is likely to trade in a range instead of declining."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD climbs to multi-week tops near 1.1700

EUR/USD rapidly leaves behind four consecutive daily pullbacks, challenging the 1.1700 hurdle in response to the severe sell-off in the Greenback as investors continued to evaluate the Fed’s rate cut and the neutral message from Chief Powell. Next on tap on the docket will be the weekly US labour market report on Thursday.

GBP/USD rebounds following Fed’s third straight rate trim

GBP/USD punched a fresh hole into seven-week highs on Wednesday, rising back into the 1.3400 neighborhood after the Federal Reserve delivered a widely expected third straight interest rate cut. Fed Chair Jerome Powell gave a particularly cautious showing, hinting that the Fed could be poised for another extended “wait and see” period.