AUD/USD faces further range bound trading – UOB

AUD/USD could now navigate within the 0.6660-0.6860 range in the next few weeks, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the rapid rise appears to be overdone and AUD is unlikely to advance further’ and we expected AUD to ‘trade sideways between 0.6770 and 0.6870’. However, instead of trading sideways, AUD plummeted to a low of 0.6737 before closing on a weak note at 0.6752 (-1.26%). While AUD could continue to decline, oversold conditions suggest it is unlikely to challenge the support at 0.6700 (next support is at 0.6660). Resistance wise, a break of 0.6820 (minor resistance is at 0.6790) would indicate that the weakness in AUD has stabilized.”

Next 1-3 weeks: “Yesterday (05 Jan, spot at 0.6825), we highlighted that while upward momentum, AUD has to break clearly above 0.6900 before a sustained rise is likely. We added, ‘the likelihood of AUD breaking clearly above 0.6900 is not high for now but it would remain intact as long as AUD stays above 0.6735 within the next few days’. In NY trade, NY plummeted and came close to taking out 0.6735 with a low of 0.6737. While 0.6735 is not breached, upward momentum has faded. The current price actions are likely part of a broad consolidation range and AUD is likely to trade between 0.6660 and 0.6860 for now.”