AUD/USD still neutral, faces further consolidation – UOB

In opinion of FX Strategists at UOB Group, the outlook on the Aussie Dollar remains neutral and is expected to extend the consolidative theme in the near term.

Key Quotes

24-hour view: “Looking further back, AUD dipped to a low of 0.7643 last Thursday before recovering quickly to trade sideways on Friday. The movement is viewed as the early stages of a basing phase. From here, while a dip to 0.7665 is not ruled out, a move below 0.7640 seems unlikely. On the upside, only a move above 0.7710 would indicate the start of a sustained recovery”.

Next 1-3 weeks: “In the latest update on Wednesday last week (28 Mar, 0.7680), we highlighted that “a dip below the expected 0.7650/0.7820 consolidation range is not ruled out but at this stage, the prospect for a sustained decline towards the major 0.7600 support is rather low”. AUD subsequently dipped to a low of 0.7643 before rebounding quickly. The price action reinforces our current view and there is no change to our neutral stance. The recent downward bias is easing and but it is too early to expect a sustained recovery. To put it another way, we continue to expect AUD to trade sideways for now, albeit likely within a narrower and lower range of 0.7630/0.7770”.