AUD/USD: Likely to trade with an upward bias toward 0.6550 – UOB Group

Australian Dollar (AUD) is expected to consolidate in a range between 0.6455 and 0.6510 vs US Dollar (USD). In the longer run, rapid buildup in momentum suggests AUD is likely to trade with an upward bias toward 0.6550, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Upwards momentum builds up fast

24-HOUR VIEW: "Last Friday, AUD soared to 0.6500. In the early Asian session yesterday, we indicated that 'the rapid advance appears to be excessive, but there is scope for AUD to rise above 0.6515, the high seen earlier this month.' We added, 'given the overbought conditions, any further advance is unlikely to reach 0.6550.' AUD then rose to 0.6537, pulling back to close modestly lower at 0.6490 (-0.13%). AUD has not fully unwound from overbought conditions. Today, we expect AUD to consolidate in a range between 0.6455 and 0.6510."

1-3 WEEKS VIEW: "We revised our view to positive yesterday (26 May, spot at 0.6495), indicating that 'there has been a rapid buildup in momentum, and we expect AUD to trade with an upward bias toward 0.6550.' We will maintain the same view as long as AUD remains above 0.6430 (no change in ‘strong support’ level)."