AUD/USD could attempt some consolidation near term – UOB

AUD/USD faces a potential period of consolidation ahead of a probable move to 0.7660, noted FX Strategists at UOB Group Quek Ser Leang and Peter Chia.

Key Quotes

24-hour view: “While we expected AUD to ‘strengthen further’ yesterday, we did not expect the explosive volatility as AUD rocketed to 0.7661 before dropping sharply to end the day at 0.7575 (+0.42%). AUD is unlikely to continue to trade in a volatile manner. For today, AUD is more likely to consolidate its gains and trade between 0.7530 and 0.7630.”

Next 1-3 weeks: “We highlighted yesterday (05 Apr, spot at 0.7545) that rapid improvement in momentum suggests AUD could advance to 0.7575, possibly 0.7600. We did not expect the manner by which AUD rocketed to 0.7661 and the subsequent rapid drop from the high. The sharp and swift rally appears to be running too fast, too soon. While further AUD strength still appears likely, AUD could consolidate for a few days first before making a push above 0.7660 (next resistance is at 0.7720). On the downside, a breach of 0.7510 (‘strong support’ level was at 0.7490 yesterday) would indicate that AUD is not ready to move above 0.7660.”