Australian Dollar: Short-term range but path still lower against US Dollar – UOB

United Overseas Bank’s (UOB) Quek Ser Leang notes that AUD/USD has rebounded after an oversold slide, with intraday price action now expected between 0.7095 and 0.7130. Despite the near-term consolidation, the 1–3 week view remains for a move toward 0.7050 while 0.7140 caps the upside, even as the longer-term outlook still allows for a potential retest of 0.7277.

Aussie-Dollar consolidates within broader decline

"24-HOUR VIEW: AUD fell sharply to a low of 0.7075 two days ago. When it was at 0.7090 in the early Asian session yesterday, we indicated the following: “The sharp decline appears to be overdone, but with no signs of stabilisation just yet, the risk remains on the downside today. However, this time around, AUD is likely to stay within a 0.7070/0.7115 range.” We were incorrect, as AUD rebounded strongly to 0.7128. AUD closed 0.35% higher at 0.7112. The immediate downside pressure has eased, and today, AUD is likely to range-trade between 0.7095 and 0.7130."

"1-3 WEEKS VIEW: On Tuesday (15 Sep, spot at 0.7135), we highlighted that “while further weakness is not ruled out, short-term conditions are oversold, and AUD must close below 0.7100 before a move to 0.7050 can be expected.” After AUD fell and closed at 0.7087, we highlighted yesterday (17 Sep, spot at 0.7090) that AUD “is expected to drop to 0.7050.” While we did not expect the subsequent strong rebound, we will maintain our view as long as AUD holds below 0.7140 (no change in ‘strong resistance’ level). A breach of 0.7140 would mean the decline from early this week has stabilised."

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