AUD/USD: Expected to consolidate between 0.6440 and 0.6550

There has been a slight increase in upward momentum; the Australian Dollar (AUD) could drift higher but is unlikely to break the resistance at 0.6525. In the longer run, AUD is expected to consolidate between 0.6440 and 0.6550 for the time being, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

AUD can drift higher but is unlikely to break above 0.6525

24-HOUR VIEW: “Two days ago, we were of the view that AUD ‘could break below 0.6440, but it might not be able to maintain a foothold below this level.’ After AUD dropped to 0.6434 and rebounded, we indicated yesterday that ‘downward momentum appears to have eased with the strong rebound.’ We held the view that AUD ‘is likely to trade in a range today, probably between 0.6440 and 0.6500.’ AUD then traded in a narrower range than expected (0.6457/0.6500), closing at 0.6497, higher by 0.36%. There has been a slight increase in momentum. Today, AUD could drift higher, but it is unlikely to break the resistance at 0.6525 (there is another resistance at 0.6510). On the downside, support levels are at 0.6480 and 0.6460.”

1-3 WEEKS VIEW: “In our latest narrative from Tuesday (26 Nov, spot at 0.6470), we pointed out that AUD ‘must break and hold below 0.6440 before a move to 0.6400 can be expected.’ We indicated, ‘The likelihood of AUD breaking clearly below 0.6440 will increase in the next few days, provided that 0.6525 is not breached.’ Yesterday, AUD rose to 0.6500, closing on a firm note at 0.6497 (+0.36%). While our ‘strong resistance’ level has not been breached yet, downward momentum has largely faded. The current price movements are likely part of a consolidation phase. For the time being, we expect AUD to trade between 0.6440 and 0.6550.”

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