Sharp rally in Australian Dollar (AUD) seems to have enough momentum to test 0.6195 before leveling off. In the longer run, for the time being, AUD is expected to trade in a 0.6000/0.6290 range, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
AUD is expected to trade in a 0.6000/0.6290 range
24-HOUR VIEW: "We noted yesterday that 'downward momentum has increased slightly.' We held the view that AUD 'is likely to edge lower but is unlikely to reach 0.5870' and that 'there is another support at 0.5900.' AUD subsequently dipped to 0.5910. In the NY session, it staged a sharp rally that sent it soaring by 3.30% (0.6152), marking its largest one-day rise since 2010. While the outsized rally appears overdone, AUD seems to have enough momentum to test 0.6195 before leveling off. The major resistance at 0.6290 is not expected to come into view. On the downside, supports are located at 0.6100 and 0.6055."
1-3 WEEKS VIEW: "We indicated on Tuesday (08 Apr, spot at 0.6005) that 'although further declines are not ruled out, given the deeply oversold conditions, it is unclear if AUD can reach the next support at 0.5870.' Yesterday, Wednesday, AUD dropped to 0.5910 and then, in a stunning reversal, surged to a high of 0.6174. Not surprisingly, downward momentum has dissipated. Upward has increased, but not enough to indicate a sustained rise. For the time being, we expect AUD to trade in a 0.6000/0.6290 range."
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