Gains in AUD/USD look limited for the time being – UOB

FX Strategists at UOB Group believe AUD/USD will likely move into a consolidative phase in the next sessions.

Key Quotes

24-hour view: “Our expectation for AUD to “drift lower to 0.6700” did not quite materialize as it traded between 0.6707 and 0.6745. The underlying tone still appears to be a bit soft and from here, barring a move above 0.6745 (minor resistance at 0.6730), AUD could edge down towards 0.6690.”

Next 1-3 weeks: “AUD rebounded and moved above our 0.6740 ‘strong resistance’ as it rose to 0.6750 yesterday (12 Feb). While our view from Monday (10 Feb, spot at 0.6675) wherein we expected ‘further weakness to 0.6620’ is proven wrong, we are not convinced the current short-term AUD strength could extend much higher. For now, we expect AUD to trade sideways between 0.6650 and 0.6780. Looking forward, only a clear breach of 0.6780 would suggest that Monday’s low of 0.6657 is a more significant bottom than currently expected.”