The Australian Dollar (AUD) could dip below 0.6800 before stabilisation is likely; the next support at 0.6750 is not expected to come into view. In the longer run, advance in AUD has come to an end; it is likely to trade between 0.6750 and 0.6900 for now, UOB Group FX strategists Quek Ser Leang and Lee Sue Ann note.
Advance in AUD has come to an end
24-HOUR VIEW: “We expected AUD to ‘continue to rise yesterday.’ Our view was incorrect, as it sold off sharply instead, plunging to a low of 0.6817 (closed at 0.6823, -1.00%). The sharp drop could dip below 0.6800 before stabilisation is likely. The next support at 0.6750 is not expected to come into view. On the upside, if AUD breaks above 0.6865 (minor resistance is at 0.6845), it would indicate that the weakness has stabilised.”
1-3 WEEKS VIEW: “We have held a positive AUD view since early last week. As we tracked the advance, in our update from yesterday (25 Sep, spot at 0.6900), we held the view that it ‘could advance further to 0.6955.’ We indicated that ‘the positive outlook is intact as long as 0.6820 (‘strong support’ level) is not breached.’ We did not expect the sharp and swift drop, as AUD plummeted to a low of 0.6817. The price action indicates that the advance in AUD has come to an end. AUD has likely moved into a range trading phase, and it is likely to trade between 0.6750 and 0.6900 for now.”
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