AUD/USD: Short-term bottom remains at 0.5510 – UOB

FX Strategists at UOB Group believe AUD/USD have charted a near-term bottom above 0.5500 (March 19^th).

Key Quotes

24-hour view: “Our view yesterday was that AUD ‘could break 0.6000 but the next resistance at 0.6060 is likely out of reach’. However, AUD soared to 0.6073 before dropping back sharply. Upward pressure has dissipated and the rapid drop from the high has scope to extend lower. That said, any weakness from here is viewed as part of 0.5840/0.5980 range (a sustained decline below 0.5840 appears unlikely).”

Next 1-3 weeks: “While our ‘strong resistance’ level of 0.6000 is still intact (overnight high of 0.5974), the strong gain of +2.05% (0.5954) yesterday is enough to indicate that last Thursday’s (19 Mar) low of 0.5510 is a short-term bottom. In other words, the sharp decline over the past couple of weeks has stabilized. Looking ahead, AUD could still drop below 0.5510 but for the next one week or so, it is more likely to ‘chop around’ within a broad range, estimated to be between 0.5650 and 0.6250.”