Scope for Australian Dollar (AUD) to edge higher, but any advance is likely limited to a test of 0.6815. In the longer run, outsized advance suggests further AUD strength; given the overbought conditions, it remains to be seen if 0.6870 is within reach, UOB Group FX strategists Quek Ser Leang and Lee Sue Ann note.
The 0.6870 resistance may be out of reach
24-HOUR VIEW: “AUD traded between 0.6762 and 0.6796 yesterday, higher than our expected sideways trading range of 0.6750/0.6790. The price action has resulted in a slight increase in upward momentum. Today, there is scope for AUD to edge higher, but any advance is likely limited to a test of 0.6815. The major resistance at 0.6870 is unlikely to come under threat. On the downside, a breach of 0.6760 (minor support is at 0.6775) would indicate that the current mild upward pressure has eased.”
1-3 WEEKS VIEW: “Our update from Monday (26 Aug, spot at 0.6790) is still valid. As indicated, while the outsized advance from last Friday suggests further AUD strength, given the overbought conditions, it remains to be seen if 0.6870 is within reach in the next 1 to 2 weeks. On the downside, if AUD breaks the ‘strong support’ at 0.6730 (level previously at 0.6710), it would suggest that it is not strengthening further.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD: Recovery remains capped below 0.6700
AUD/USD holds recovery below 0.6700 in the Asian session on Wednesday, having hit over a one-month low amid the Chinese stimulus scepticism-led risk aversion. However, a renewed US Dollar selling aids the pair's rebound alongside RBA Hunter's hawkish remarks.
USD/JPY stays weak near 149.00 amid risk aversion, BoJ commentary
USD/JPY is trading with mild losses near 149.00 early Wednesday. The risk-off impulse supports the safe-haven Japanese Yen while the US Dollar also loses ground and adds to the weight on the pair. Traders digest BoJ Adachi's comments for fresh cues on the policy outlook.
Gold buyers yearn for a daily close above $2,670
Gold price is building on the previous recovery early Wednesday, challenging the static resistance level at $2,670. Gold buyers stay optimistic amid a bullish technical setup on the daily time frame and broad risk aversion.
UK CPI set to grow below 2% target in September, core inflation to remain high
United Kingdom’s Office for National Statistics will release the CPI report on Wednesday. The annual UK headline and core inflation are expected to ease in September. The UK CPI data could seal in a BoE November interest-rate cut, a scenario that would weigh on Pound Sterling.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.