Rising bets for further upside in AUD/USD – UOB

AUD/USD could extend the bullish momentum to the mid-0.7500s in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected AUD to strengthen yesterday but we were of the view that ‘any advance is unlikely to break 0.7520’. The subsequent advance exceeded our expectations as AUD rose to 0.7525. Upward momentum has improved and AUD could strengthen further even though the major resistance at 0.7550 is likely out of reach for today.  On the downside, a breach of 0.7485 would indicate that the current upward pressure has eased (minor support is at 0.7500).”

Next 1-3 weeks: “We have held a positive view in AUD for more than 2 weeks now. After AUD rose to 0.7547 and retreated sharply, in our latest narrative from last Friday (22 Oct, spot at 0.7460), we highlighted that ‘rapid drop from the high has resulted in a quick loss in momentum’. We added, ‘a break of our ‘strong support’ at 0.7440 would indicate that the positive phase has come to an end’. The ‘strong support’ level remains intact as AUD moved higher the past couple of days. Upward momentum is beginning to build and the prospect for the current AUD strength to move to 0.7550 has increased. Looking ahead, the next resistance is at 0.7580. On the downside, the ’strong support’ level has moved higher to 0.7460 from 0.7440.”