AUD/USD: Likely to strengthen further but is unlikely to reach 0.6700 – UOB Group

FXStreet Insights Team FXStreet

Australian Dollar (AUD) is likely to strengthen further but is unlikely to reach 0.6700. In the longer run, the price action continues to suggest a higher AUD; the next level to watch is 0.6700, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Price action continues to suggest a higher AUD

24-HOUR VIEW: "AUD rose to a high of 0.6639 on Wednesday. Yesterday, Thursday, we pointed out that 'despite the advance, we did not detect a significant increase in upward momentum.' However, we indicated that 'there is a chance for AUD to test 0.6645 before the risk of a pullback increases.' We added, 'support levels are at 0.6600 and 0.6585.' We did not expect the volatile price action, as AUD dropped to a low of 0.6591 and then staged a surprisingly sharp rally that reached a high of 0.6665. Strong momentum indicates likely further strengthening of AUD, but overbought conditions suggest that 0.6700 is likely out of reach for now. Today’s support levels are at 0.6640 and 0.6620."

1-3 WEEKS VIEW: "We turned positive on AUD early this week (as annotated in the chart below). Tracking the subsequent advance, we highlighted yesterday (11 Sep, spot at 0.6615), that 'momentum indicators still point to a higher AUD, but with conditions quickly approaching overbought levels, it remains to be seen if the next resistance at 0.6670 will come into view.' We did not quite expect AUD to soar to a high of 0.6665. The price action continues to suggest a higher AUD, and the next level to watch above 0.6670 is 0.6700. On the downside, the ‘strong support’ level is now at 0.6590, up from yesterday’s level of 0.6560."

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.

GBP/USD flirts with weekly highs in the Fed's aftermath

GBP/USD reversed early losses following the Federal Reserve decision to keep rates on hold and neared the 1.3360 level before shedding some ground. Focus shifts to Governor Kevin Warsh's speech, while the Bank of England will announce its monetary policy decision on Thursday.

EUR/USD extends rally pass 1.1450 on Fed's Warsh

EUR/USD trades at fresh weekly highs above 1.1450, following the Federal Reserve monetary policy decision to keep interest rates on hold. The statement showed policymakers remain confident in economic progress while blaming inflation on energy prices. The divided vote among officials put in doubt a September hike, leading to sharp US Dollar losses.

Gold faces rejection near $4,100 amid emergence of USD dip-buying

Gold struggles to build on a modest intraday uptick beyond $4,100 during the Asian session on Thursday as the US Dollar attracts some dip-buyers following the previous day's post-FOMC slide to a one-week low. Escalating US-Iran tensions support oil prices, fueling inflation fears and bolstering bets for at least one Fed rate hike in 2026. This, in turn, underpins the Greenback and acts as a headwind for the non-yielding bullion.

Bitcoin trails US Dollar as Fed holds rate steady

The Federal Reserve (Fed) kept its benchmark interest rate unchanged at 3.50% to 3.75% at its July meeting on Wednesday, in line with market expectations. Minutes from the meeting showed that economic activity has been expanding at a solid pace despite elevated uncertainty. The central bank also noted that job gains have "kept pace with the workforce."

No soft target: Warsh vows to return inflation to 2%

The Fed left interest rates unchanged at 3.50%-3.75%, but the decision carried a distinctly hawkish edge as three officials voted for an immediate 25-basis-point increase. Chair Kevin Warsh reinforced that message, insisting there was no tolerance for a softer inflation target and warning that the Fed would not hesitate to act.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.