Australian Dollar (AUD) could retest the 0.6220 level; any further decline is not expected to reach 0.6185. Increase in momentum indicates AUD could continue to decline, but it is too early to determine if it can reach 0.6185, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Momentum indicates AUD can continue to decline
24-HOUR VIEW: "AUD fell sharply yesterday, dropping to a low of 0.6219 before closing on a weak note at 0.6250 (-0.64%). While the rapid drop appears to be overdone, there is no sign of stabilisation just yet. Today, AUD could retest the 0.6220 level, but given the oversold conditions, any further decline is not expected to reach the major support at 0.6185. Resistance is at 0.6265, followed by 0.6280."
1-3 WEEKS VIEW: "Our most recent narrative was from last Wednesday (26 Mar, spot at 0.6305), wherein AUD 'appears range-bound for now, likely between 0.6240 and 0.6355.' AUD subsequently traded sideways until yesterday, when it plummeted to a low of 0.6219. The sharp drop has resulted in an increase in downward momentum, and AUD is likely to continue to decline. Currently, it is too early to determine if AUD has enough momentum to reach last month’s low, near 0.6185. To sustain the buildup in momentum, AUD must remain below the ‘strong resistance’ level, currently at 0.6300."
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