FX Strategists at UOB Group stay neutral on the pair and add that a visit to the 0.74 handle have lost some momentum.
24-hour view: “Expectation for further AUD weakness was incorrect as it staged a surprisingly strong rebound to hit an overnight high of 0.7523. While the recovery appears to be running ahead of itself, there is room for a test of the strong 0.7540 level. At this stage, a sustained move above this level seems unlikely (next resistance is at 0.7570). On the downside, support is at 0.7480 followed by the 0.7447 low seen early yesterday”.
Next 1-3 weeks: “AUD recovered most of Tuesday’s decline as it rebounded to hit an overnight high of 0.7524. This level is not from the ‘key resistance’ indicated at 0.7540 yesterday. As highlighted, a break of 0.7540 would indicate that the current mild downward pressure has eased. Until then, another push lower towards the major 0.7400 support is not ruled out just yet but the prospect for such a move has diminished”.
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