AUD/USD: The next level to watch is 0.6400

Provided that 0.6490 remains intact, the Australian Dollar (AUD) could decline further; the major support at 0.6400 is unlikely to come into view. In the longer run, further AUD weakness still appears likely; the next level to watch is 0.6400, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Further AUD weakness still appears likely

24-HOUR VIEW: “Yesterday, when AUD was at 0.6495, we expected AUD to ‘edge lower, possibly reaching 0.6460.’ We were of the view that ‘the major support at 0.6440 is likely out of reach.’ Our view was validated, as AUD dropped to 0.6441, recovering slightly to close at 0.6454 (- 0.48%). Although there is no significant increase in momentum, the bias for AUD remains on the downside. Today, provided that 0.6490 remains intact (minor resistance is at 0.6470), AUD could decline further. However, the major support at 0.6400 is unlikely to come into view. Note that there is another support level at 0.6420.”

1-3 WEEKS VIEW: “We indicated yesterday that AUD ‘is likely to decline further, and the levels to monitor are 0.6460 and 0.6440.’ While our view of a weaker AUD was not wrong, we did not quite expect it to drop as quickly (low has been 0.6441). Further AUD weakness still appears likely. The next level to watch is 0.6400. On the upside, should AUD break above 0.6520 (‘strong resistance’ level was at 0.6550 yesterday), it would mean that the weakness has stabilised.”

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