In the opinion of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, losses in AUD/USD could accelerate once 0.6365 is breached.
Key Quotes
24-hour view: Last Friday, AUD traded in a range of 0.6380/0.6428 before ending the day little changed at 0.6405 (+0.05%). We view the price actions as part of a consolidation phase. Today, AUD is likely to trade sideways in a range of 0.6390/0.6450.
Next 1-3 weeks: The AUD weakness that started late last month is still intact. However, short-term conditions are severely oversold, and the pace of any further weakness is likely to be slow. To look at it another way, in order for AUD to weaken further, it must break and stay below last week’s low of 0.6365. The chance of AUD breaking clearly below 0.6365 will remain intact as long as it stays below 0.6480 (‘strong resistance’ level). Looking ahead, the next support below 0.6365 is at 0.6320.
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