AUD/USD now targets the 0.6745 level – UOB

In the opinion of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, further gains could lift AUD/USD to the 0.6745 zone in the short-term horizon.

Key Quotes

24-hour view: The strong surge in AUD last Friday came as a surprise (we were expecting it to trade in a range). The rapid increase in momentum is likely to lead to further AUD strength. However, the major resistance at 0.6745 is likely out of reach for now. Note that there is another resistance at 0.6715. To maintain the momentum, AUD must not break below 0.6640 (minor support is at 0.6660).

Next 1-3 weeks: After AUD dropped and breached our ‘strong support’ level of 0.6575 last Thursday (low has been 0.6571), we shifted from a positive AUD stance to a neutral one on Friday (01 Dec, spot at 0.6610). We held the view that AUD “is likely to trade in a range between 0.6530 and 0.6665.” However, AUD lifted off and then closed on a strong note at 0.6676 (+1.08%). The price action indicates that our view for AUD to trade in a range was wrong. To put it another way, the AUD strength that started in the middle of last month is still intact. From here, as long as AUD stays above 0.6620, it could continue to rise towards the major resistance at 0.6745.