There is a chance for Australian Dollar (AUD) to test 0.6480 against US Dollar (USD). In the longer run, there has been a tentative buildup in momentum; AUD is likely to edge lower to 0.6480, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Tentative buildup in momentum
24-HOUR VIEW: “AUD fell sharply to a low of 0.6508 two days ago. In the early Asian session yesterday, when AUD was at 0.6520, we pointed out that ‘the sharp drop looks overstretched, but there is a chance for AUD to test 0.6500.’ We added, ‘the major support at 0.6480 is unlikely to come into view, and resistance levels are at 0.6540 and 0.6555.’ Our view was not wrong, as AUD dropped to a low of 0.6496 and then bounced to a high of 0.6554. AUD traded on a soft note in the early Asian trade today, and there is a chance for it test 0.6480. Based on the current momentum, AUD is unlikely to be able to break below 0.8480. Today’s resistance levels are at 0.6530 and 0.6550.”
1-3 WEEKS VIEW: “We turned mildly negative on AUD yesterday (16 Jul, spot at 0.6520), indicating that ‘there has been a tentative buildup in momentum, and AUD is likely to edge lower to 0.6480.’ We also indicated that ‘to maintain the momentum buildup, AUD must hold below the ‘strong resistance’ level, currently at 0.6575.’ There is no change in our view.”
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