AUD/USD: Unlikely to weaken much further – UOB Group
Australian Dollar (AUD) is unlikely to weaken much further; it is likely to trade in a lower range of 0.6420/0.6455. In the longer run, risk for AUD is tilted to the downside toward 0.6420, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
AUD/USD is likely to trade in a lower range of 0.6420/0.6455
24-HOUR VIEW: "Following the sharp drop in AUD on Tuesday, we highlighted yesterday, Wednesday that 'while the rapid increase in downward momentum is likely to lead to further losses, oversold conditions suggest any decline may not reach the month-to-date low, near 0.6420.' We were not wrong, as AUD declined to a low of 0.6424 before settling at 0.6433 (-0.33%). Downward momentum appears to be slowing, and AUD is unlikely to weaken much further. Today, AUD is more likely to trade in a lower range, probably between 0.6420 and 0.6455."
1-3 WEEKS VIEW: "We revised our view to negative yesterday (20 Aug, spot at 0.6455). We stated that 'downward momentum is increasing, and the risk for AUD is tilted to the downside toward 0.6420.' We pointed out that AUD 'must break and hold below this level before further sustained decline can be expected.' We continue to hold the same view as long as 0.6485 (‘strong resistance’ level was at 0.6505 yesterday) is not breached. Looking ahead, should AUD break clearly below 0.6420, the levels to watch are 0.6400 and 0.6375."
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FXStreet Insights Team
FXStreet
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