AUD/USD: To rise above the early-month high of 0.6515 – UOB Group

There is scope for Australian Dollar (AUD) to rise above the early-month high of 0.6515 vs US Dollar (USD); any further advance is unlikely to reach 0.6550. In the longer run, rapid buildup in momentum suggests AUD is likely to trade with an upward bias toward 0.6550, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Any further advance is unlikely to reach 0.6550

24-HOUR VIEW: "Last Friday, we noted that AUD 'is under mild downward pressure.' We held the view that AUD 'is likely to edge lower to 0.6395.' We were incorrect, as after dipping to 0.6409, AUD lifted off and closed higher by a whopping 1.39% (0.6498). The rapid advance appears to be excessive, but there is scope for AUD to rise above 0.6515, the high seen earlier this month. Given the overbought conditions, any further advance is unlikely to reach 0.6550. On the downside, we expect any pullback to stay above 0.6460 (minor support is at 0.6480)."

1-3 WEEKS VIEW: "Our most recent narrative was from last Wednesday (21 May, spot at 0.6425) wherein 'the recent choppy price action has resulted in a mixed outlook.' We were of the view that AUD 'is likely to trade in a range between 0.6370 and 0.6480 for the time being.' Last Friday, AUD surged and reached a high of 0.6500. There has been a rapid buildup in momentum, and we expect AUD to trade with an upward bias toward 0.6550. To sustain the momentum buildup, AUD must remain above 0.6430."