The negative view on AUD/USD remains well and sound and it could attempt a move to the mid-0.6500s in the short-term horizon, in opinion of FX Strategists at UOB Group.
Key Quotes
24-hour view: “Our view for AUD last Friday was that it ‘could dip below 0.6600 but the next support at 0.6570 is likely out of reach’. AUD subsequently dropped to 0.6586 before rebounding. Downward pressure has eased and the current movement is viewed as part of a consolidation phase. In other words, AUD is expected to trade sideways for today, likely between 0.6580 and 0.6640.”
Next 1-3 weeks: “We highlighted on Wednesday (19 Feb, spot at 0.6690) that the bottom of expected sideway-trading range of 0.6650/0.6780 is more vulnerable. However, the manner by which AUD took out 0.6650 and the subsequent sharp plunge of -0.99% (NY close of 0.6612) came as a surprise. While the risk for AUD from here is clearly on the downside, it has already moved a considerable distance since the start of this year. From here, we have a relative modest ‘target’ at 0.6550. On the upside, the ‘strong resistance’ level at 0.6680 is expected to be strong enough to hold, at least for the next few days.”
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