In light of the recent price action, FX Strategists now forecast a probable move to the 0.7200 area in AUD/USD in the next weeks.
Key Quotes
24-hoour view: “We expected AUD to consolidate and trade between 0.7100 and 0.7180 yesterday. While AUD traded sideways, the range of 0.7091/0.7162 was slightly lower and narrower than expected. Momentum indicators are still mostly neutral and AUD is likely to continue to consolidate from here albeit at a lower range of 0.7070/0.7150.”
Next 1-3weeks: “We detected the pick-up in upward momentum relatively early as we highlighted last Wednesday (15 Jul, spot at 0.6985) that ‘if AUD closes above 0.7010, it could move to the June’s peak of 0.7067’. AUD subsequently traded sideways and the lack of improvement in momentum prompted us to indicate on Monday (20 Jul, spot at 0.7000) that AUD ‘could inch higher but 0.7067 is likely out of reach’. However, AUD did anything but inch as it lifted off and surged to a high of 0.7147 yesterday (21 Jul) before closing higher by +1.58% (0.7128), its biggest 1-day gain since early June. Upward momentum received a strong boost and from here, the next level to focus on is at 0.7200. Looking ahead, the next resistance is at 0.7250. The current positive phase in AUD is deemed as intact unless AUD moves below 0.7030 (‘strong support’ level was at 0.6930 yesterday).”
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