AUD/USD: upside bias remains modest – UOB

In opinion of FX Strategists at UOB Group, only above 0.6950 the ongoing weakness in AUD/USD could lose momentum.

Key Quotes

24-hour view: “It appears that the recent decline from about 0.7000 to 0.6850 has stabilized. That said, the ensuring recovery is likely to take on a gradual pace with the next target at 0.6930. On the downside, look for support at 0.6860 and only a move below 0.6835 would indicate renewed downside momentum.”

Next 1-3 weeks: “The major support at 0.6820 held as expected, with AUD only getting as low as 0.6850 in the past 3 sessions. Although AUD has recovered to about 0.6900 currently, upside momentum remains remain modest at best. As before, we maintain that ‘only a move back above 0.6950 would indicate the current weakness has stabilized’ and it is probably too early to tell that AUD is out of the woods. On the downside, look for supports at 0.6850 and 0.6820 and if AUD was to register a NY closing below 0.6820, it would indicate that the late December high of 0.7032 is a more significant top than currently expected.”