AUD/USD expected to advance to 0.7250 in the near term – UOB

FX Strategists at UOB Group noted AUD/USD faces another solid resistance around 0.7275 in the near term.

Key Quotes

24-hour view: “Our expectations for AUD to ‘consolidate within a range of 0.7160/0.7215’ yesterday were incorrect as it rose to 0.7234. Despite the advance, upward momentum has not improved by much. However, there is room for AUD to advance further even though a clear break of the major resistance at 0.7250 is unlikely (next resistance at 0.7275 is not expected to come into the picture). On the downside, a breach of 0.7190 (minor support is at 0.7205) would indicate that the current mild upward pressure has eased.”

Next 1-3 weeks: “We have expected AUD to advance to 0.7250 since last Thursday (17 Feb, spot at 0.7205). As AUD struggle to maintain its upward momentum, we highlighted yesterday (22 Feb, spot at 0.7190) that the chance for AUD to advance to 0.7250 has diminished. We added, ‘in order to rejuvenate the flagging momentum, AUD has to move and stay above 0.7215 within these 1 to 2 days’. AUD subsequently rose to 0.7234 before settling on a firm note at 0.7219 (+0.42%). The chance for AUD to move above 0.7250 has improved but it is left to be seen if it can maintain a foothold above this level. Looking ahead, the next resistance above 0.7250 is another strong level at 0.7275. Overall, only a breach of 0.7160 (‘strong support’ level was at 0.7140 yesterday) would indicate that the current upside risk has dissipated.”