AUD/USD now faces some consolidation – UOB

In the opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, AUD/USD is now expected to navigate between 0.6900 and 0.7040 for the time being.

Key Quotes

24-hour view: “We highlighted last Friday that AUD ‘could edge higher to 0.7020’. We added, ‘the major resistance at 0.7040 is unlikely to come under threat’. AUD subsequently rose to 0.7032, plummeted to 0.6912 before snapping back up to close largely unchanged (0.6991, -0.02%). Further choppy price actions are not ruled out, albeit likely within a narrower range of 0.6935/0.7020.”

Next 1-3 weeks: “We have held a positive view in AUD for about 2 weeks now. In our latest narrative from last Thursday (28 Jul, spot at 0.6990), we highlighted that while upward momentum has not improved by much, there is scope for AUD to advance further to 0.7040. AUD rose to 0.7032 on Friday before dropping sharply and took out our ‘strong support’ level at 0.6935 (low of 0.6912). The break of the ‘strong support’ level indicates that AUD strength has ended. The current movement appears to be part of a consolidation and AUD is likely to trade between 0.6900 and 0.7040 for now. Looking ahead, AUD has to close above 0.7040 before further sustained advance is likely.”