Australian Dollar: Weakness may extend toward 0.6970 against US Dollar - UOB

UOB’s Quek Ser Leang and Lee Sue Ann observe that AUD/USD extended its recent slide to 0.7006, with positive divergence hinting at slowing momentum but not yet a clear base. They maintain a negative short-term stance, seeing scope for a test of 0.6970, while intraday moves are expected to stay within 0.6995–0.7035 unless resistance at 0.7075 breaks.

Australian Dollar still under pressure

"24-HOUR VIEW: After staging a sharp decline two days ago, AUD extended its decline yesterday with a low of 0.7006. While the weakness has not quite stabilised, positive divergence is forming, pointing to slowing downward momentum. In other words, AUD is unlikely to weaken much further. Today, AUD is more likely to edge lower within a 0.6995/0.7035 range."

"1-3 WEEKS VIEW: We turned negative on AUD two weeks ago. In our most recent narrative from Tuesday (22 Sep, spot at 0.7120), we highlighted that while “we will maintain our negative stance for now, the likelihood of AUD reaching 0.7050 has diminished considerably.” AUD subsequently plunged below 0.7050 and reached a low of 0.7006 yesterday. While the decline over the past two weeks has been substantial, there is scope for AUD to edge lower and test 0.6970 before stabilisation is likely. On the upside, a breach of 0.7075 would indicate that the weakness is stabilising."

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