AUD/USD: Likely to test 0.6500 – UOB Group
There is room for Australian Dollar (AUD) to test 0.6500 against US Dollar (USD); a sustained decline below this level is unlikely. In the longer run, upward momentum has dissipated, signs of building downward momentum; AUD is likely to edge lower, potentially reaching 0.6480, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Upward momentum has dissipated
24-HOUR VIEW: "We expected AUD to 'consolidate in a range of 0.6555/0.6595' yesterday. Our view of consolidation was incorrect, as AUD plummeted to a low of 0.6513. Despite the decline, AUD has not gained much momentum. However, there is room for AUD to test 0.6500. Based on the current momentum, a sustained decline below this level is unlikely. The next support at 0.6480 is also unlikely to come under threat. Resistance is at 0.6545; a break back above 0.6560 would indicate that the decline in AUD is starting to stabilise."
1-3 WEEKS VIEW: "We have held a positive AUD view since the middle of last week. After AUD reached our prior technical objective at 0.6625 and pulled back, we highlighted last Friday (25 Jul, spot at 0.6590) that 'while short-term momentum has eased slightly, AUD may still move to 0.6645, but the odds are not high.' We also indicated that 'a break of 0.6545 (‘strong support’ level) would mean that 0.6645 is out of reach.' AUD then fell sharply to a low of 0.6513, closing at 0.6521, down by 0.67%. Not only has upward momentum dissipated, but there are also early signs of building downward momentum. From here, AUD is likely to edge lower, potentially reaching 0.6480. To maintain the build-up in momentum, AUD must hold below 0.6585."
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