AUD/USD is seen navigating within 0.7000-0.7135 – UOB

In the opinion of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, AUD/USD could now trade between 0.7000 and 0.7135 in the short term.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the sharp and rapid rise appears to be overdone but AUD could rise above 0.7170 first before easing’. AUD subsequently rose to 0.7158 before dropping sharply to a low of 0.7069. Despite the decline, downward momentum has not improved much. Today, AUD is likely to trade in a range, expected to be between 0.7040 and 0.7110.”

Next 1-3 weeks: “We noted yesterday (02 Feb, spot at 0.7145) that despite the advance in AUD on Wednesday, upward momentum has not improved much. However, we were of the view that AUD is likely to trade with an upward bias toward 0.7230. AUD rose to 0.7158 before staging a surprisingly sharp pullback. While our ‘strong support’ level at 0.7050 is not breached, upward momentum has more or less fizzled out. In other words, AUD is not ready to head higher to 0.7230. Instead, it is more likely to consolidate between 0.7000 and 0.7135 for now.”