Australian Dollar: Rebound tests 0.7060 resistance against US Dollar – UOB

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note AUD/USD’s sharp rebound from 0.6979 to 0.7055 has room to extend toward 0.7060, though a clear break above this level is seen as unlikely near term. Over 1–3 weeks, fading downside momentum means a sustained move above 0.7060 would confirm 0.6979 as the trough of the current decline, even as 1–3 month risks remain tilted lower.

Short-term bounce against broader downside risks

"24-HOUR VIEW: When AUD was at 0.6995 in the early Asian session yesterday, we indicated that it “could continue to ratchet lower.” However, we stated that “a break below 0.6975 appears unlikely.” We also indicated that “to sustain the tentative downward momentum, AUD must hold below 0.7030, with minor resistance at 0.7015.” AUD subsequently fell to a low of 0.6979, and then, in a sudden move, rebounded strongly to 0.7055. The sharp rebound has room to test 0.7060 before pausing. A clear break above this level is unlikely. On the downside, a breach of 0.7015 (minor support is at 0.7030) would indicate that AUD is not likely to test 0.7060."

"1-3 WEEKS VIEW: Tracking our negative AUD view from last week, we highlighted yesterday (11 Jun, spot at 0.6995) that the price action over the past couple of days “suggests that AUD could grind lower toward 0.6975.” AUD then dipped to a low of 0.6979 before rebounding strongly to a high of 0.7055. Downward momentum has eased, and a clear break above 0.7060 (no change in ‘strong resistance’) would indicate that 0.6979 is the extent of the current phase of decline."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)