The Australian Dollar (AUD) could continue to weaken, but it does seem to have sufficient momentum to break clearly below 0.6820 for now. In the longer run, there has been a slight increase in momentum; the risk of AUD breaking below 0.6820 has also increased, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.
The risk of AUD breaking below 0.6820 has increased
24-HOUR VIEW: “Our view of sideways trading yesterday was incorrect, as AUD fell to a low of 0.6830. Downward momentum has increased, albeit not significantly. Today, AUD could continue to weaken, but it does seem to have enough momentum to break clearly below the major support at 0.6820. On the upside, a breach of 0.6880 (minor resistance is at 0.6865) would mean that AUD is not weakening further.”
1-3 WEEKS VIEW: “Our most recent narrative was from Wednesday (02 Oct, spot at 0.6880), wherein AUD ‘has likely entered a range trading phase, and it is expected to trade between 0.6820 and 0.6935 for the time being.’ Yesterday, AUD dropped to a low of 0.6830. There has been a slight increase in downward momentum, and the risk of AUD breaking below 0.6820 has also increased. To maintain the current tentative buildup in momentum, AUD must remain below 0.6905 in the next few days. Looking ahead, below 0.6820, there is another major support nearby at 0.6795.”
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