A slight increase in downward momentum is likely to lead to a lower range of 0.6400/0.6465 instead of a sustained decline. In the longer run, to continue to rise, Australian Dollar (AUD) must break and hold above 0.6515, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Above 0.6515, AUD to continue to rise
24-HOUR VIEW: “While we expected ‘further AUD strength’ yesterday, we indicated that ‘any advance is likely part of a higher range of 0.6420/0.6515.’ After rising to 0.6501, AUD pulled back to 0.6424 before closing on a soft note at 0.6429, a declilne of 0.66%. There has been a slight increase in downward momentum, but instead of a sustained decline, AUD is more likely to trade in a lower range of 0.6400/0.6465.”
1-3 WEEKS VIEW: “AUD surged two days ago, closing at 0.6472, up sharply by 1.57%. Yesterday, when AUD was at 0.6470, we highlighted the following: ‘After the sharp rally, upward momentum has strengthened, but this time around, it is not enough to indicate a sustained rise. To continue to rise, AUD must break and hold above 0.6515. The chance of AUD breaking clearly above 0.6515 will increase in the next few days, provided that the ‘strong support’ level, currently at 0.6370, is not breached.’ Our update remains valid.”
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