AUD/USD to test 0.6645 before the risk of a pullback – UOB Group

There is a chance for Australian Dollar (AUD) to test 0.6645 before the risk of a pullback increases. In the longer run, AUD could continue to move higher; with conditions quickly approaching overbought, it remains to be seen if 0.6670 will come into view, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

AUD might continue to move higher

24-HOUR VIEW: "Our view for AUD to 'consolidate in a range of 0.6560/0.6605' yesterday was incorrect, as it soared to 0.6639 — its highest level since Nov last year — before easing to close at 0.6614, up 0.42%. Despite the advance, we did not detect a significant increase in upward momentum. That said, there is a chance for AUD to test 0.6645 before the risk of a pullback increases. On the downside, support levels are at 0.6600 and 0.6585."

1-3 WEEKS VIEW: "In our latest narrative from two days ago (09 Sep, spot at 0.6590), we highlighted that the recent rapid improvement in upward momentum 'indicates that AUD may revisit the year-to-date high of 0.6625.' Yesterday, AUD rose above 0.6625 and reached a high of 0.6636. Momentum indicators still point to a higher AUD, but with conditions quickly approaching overbought levels, it remains to be seen if the next resistance at 0.6670 will come into view. Overall, only a breach of 0.6560 (‘strong support’ level was at 0.6540 yesterday) would indicate that the current upward pressure has eased."