Australian Dollar: Upside capped at 0.7070 against US Dollar - UOB

UOB strategists Quek Ser Leang and Lee Sue Ann note that AUD/USD outperformed, rising to 0.7065 and closing at 0.7055 as overbought conditions build. Intraday, they see scope for a test of 0.7070 but doubt a sustained break above that level, with 0.7095 also unlikely to be threatened. Over 1–3 weeks, renewed momentum could push above 0.7070, though 0.7095 remains uncertain.

Australian Dollar rally faces resistance

"24-HOUR VIEW: AUD popped to a high of 0.7055 during the early Asian session yesterday. When it was at 0.7035, we indicated that “upward momentum is building, but not significantly.” We also highlighted that “there is scope for AUD to test 0.7060,” but we held the view that “the major resistance at 0.7070 is likely out of reach.” AUD rose more than expected to 0.7065 before settling at 0.7055 (+0.42%). While conditions are overbought, AUD could test 0.7070 today. Given the overbought conditions, a continued rise above this level appears unlikely. The next resistance at 0.7095 is also unlikely to come under threat. Support is at 0.7030."

"1-3 WEEKS VIEW: Following our positive AUD view from the middle of last week, we highlighted two days ago (27 Oct, spot at 0.7020) that “upward momentum is starting to slow, and a break below 0.6995 (‘strong support’ level) would indicate that 0.7070 is not coming into view.” Yesterday, AUD rose to a high of 0.7065. While the renewed momentum suggests AUD could move above 0.7070, it is too early to tell whether it can strengthen sufficiently to carry AUD toward 0.7095. On the downside, the ‘strong support’ level is now at 0.7020."

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