AUD/USD: To test 0.6540 before pulling back – UOB Group

Australian Dollar (AUD) could first test 0.6540 against US Dollar (USD) before the risk of a pullback increases. In the longer run, bias remains on the upside, but it remains to be seen if AUD can break clearly above 0.6555, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Bias remains on the upside

24-HOUR VIEW: "When AUD was at 0.6490 in the early Asian session yesterday, we indicated that 'although there has been no marked increase in upward momentum, AUD could first test 0.6515 before the risk of a pullback increases.' We added, 'the major resistance at 0.6540 is probably out of reach.' The advance exceeded our expectations, as AUD rose to within two pips of 0.6540 with a high of 0.6538. AUD pulled back from the high to close 0.23% higher at 0.6508. Although there is still no significant increase in upward momentum, AUD could, this time, first test 0.6540 before the risk of a more sizeable pullback increases. A sustained break above this level seems unlikely. Note that above 0.6540, there is a nearby resistance at 0.6555. On the downside, if USD breaks below 0.6480 (minor support is at 0.6495), it would mean that the current upward pressure has faded."

1-3 WEEKS VIEW: "In our latest narrative from Tuesday (03 Jun, spot at 0.6490), we highlighted that the recent 'price action suggests AUD could continue to rise and test the significant resistance level at 0.6540.' Yesterday, Thursday, AUD rose to a high of 0.6538. Despite the advance, there is no significant increase in upward momentum. That said, the bias remains on the upside, but it remains to be seen if AUD can break clearly above 0.6555. The upside bias will remain intact, provided the ‘strong support’ at 0.6455 (level previously at 0.6430) holds."