AUD/USD still faces strong contention around 0.7670 – UOB

The ongoing weakness in AUD/USD is expected to meet decent contention in the 0.7670 region in the near-term, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “AUD traded between 0.7707 and 0.7787 yesterday, lower than our expected range of 0.7720/0.7820. The movement is still viewed as part of a consolidation phase. In other words, AUD is still expected to trade sideways, likely between 0.7730 and 0.7800.”

Next 1-3 weeks: “Last Friday (26 Feb, spot at 0.7850), we highlighted that ‘the near-term bias for AUD is titled to the downside but for now, any weakness is viewed as part of a 0.7750/0.7950 range’. We did not anticipate the subsequent sharp sell-off that sent AUD to a low of 0.7693. Despite the sharp bounce from the low, the risk for AUD is still on the downside. That said, any weakness is expected to encounter solid support at 0.7670. On the upside, a break of the ‘strong resistance’ at 0.7880 would indicate the current downside risk has dissipated.”