According to FX Strategists at UOB Group, the bearish phase in the Aussie Dollar remains well in place.
24-hour view: “AUD extended its recent weakness as it hit a ‘fresh’ low of 0.7224, just a few pips above the strong 0.7220 support. Despite the decline, we do not detect a significant improvement in downward momentum. However, a dip below 0.7220 appears likely but a break of 0.7190 today would come as a surprise (there is another major support at 0.7160). Resistance is at 0.7260 followed by 0.7290”.
Next 1-3 weeks: “We turned bearish AUD on Monday (13 Aug, spot at 0.7285) with an immediate ‘target’ of 0.7220 and were of the view that the “odds for further extension to 0.7160 are relatively high”. There is no change to our view as AUD dropped to an overnight low of 0.7224 and a break of 0.7220 would open up the way for a move to 0.7160. To put it another way, there is no indication that the current bearish phase is ending soon and only a break of the ‘stop-loss’ at 0.7330 (level previously at 0.7380) would suggest that a short-term low is in place”.
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