AUD/USD moves into a bearish phase – UOB

Pablo Piovano FXStreet

In opinion of FX Strategists at UOB Group, the outlook on the Aussie Dollar has now shifted to bearish from neutral in the near term.

Key Quotes

24-hour view: “We expected “a dip below 0.7348” last Friday but AUD plunged instead and hit a low of 0.7280 (before extending its decline early this morning to 0.7251). The rapid decline appears to be running ahead of itself and while a dip below 0.7250 would not be surprising, we do not expect a sustained decline below this level (next support is at 0.7220). On the upside, only a break of 0.7350 would indicate that the current weakness has stabilized (minor resistance is at 0.7320)”.

Next 1-3 weeks: “We highlighted on Friday (10 Aug, spot at 0.7375) that there is “room for AUD to drift lower and test 0.7310”. The subsequent price action is anything but a ‘drift’ as AUD sliced through several support levels with ease as it plummeted to a low of 0.7280 (before hitting a fresh low of 0.7251 early this morning). The impulsive break-down suggests that AUD has moved into a bearish phase and the immediate ‘target’ is at 0.7220 with relatively high odds for extension to 0.7160. ‘Stop-loss’ is at 0.7380 even though on a shorter-term note, 0.7350 is already a formidable resistance level”.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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