AUD/USD could advance to the mid-0.6500s near term – UOB
06.11.2023, 08:38

AUD/USD could advance to the mid-0.6500s near term – UOB

AUD/USD could extend its current rally to the 0.6550 zone in the short-term horizon, suggest UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia.

Key Quotes

24-hour view: Last Friday, we held the view that “there is scope for AUD to retest the 0.6455 level before easing off.” We indicated that “0.6500 is unlikely to come into view.” The anticipated AUD strength exceeded our expectations as it lifted off in NY trade and blew past both 0.6455 and 0.6500 (high has been 0.6518). While there is room for AUD to strengthen further, overbought conditions suggest any advance is unlikely to break clearly above 0.6555. Note that there is another strong resistance at 0.6525. On the downside, if AUD breaks below 0.6450 (minor support is at 0.6485), it would mean that the rally in AUD is ready to take a breather.  

Next 1-3 weeks: Last Thursday (02 Nov, spot at 0.6415), we indicated that while upward momentum has improved, AUD must break and stay above 0.6445 before further advance to 0.6500 is likely. On Friday (03 Nov, spot at 0.6425), we indicated that “while there appears to be enough momentum to suggest AUD is heading higher in the coming days, it might take a while before the major resistance at 0.6500 comes into view.” We clearly did not anticipate AUD to surge and break above 0.6500 in NY trade (high has been 0.6518). The price action suggests AUD is likely to break above 0.6525 and head towards another strong resistance level at 0.6555. In order to keep the momentum going, AUD must stay above 0.6425 (‘strong resistance’ was at 0.6340 last Friday). On a short-term note, 0.6450 is already a solid support level. 

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