AUD/USD: Next support comes at 0.6995 – UOB

In opinion of FX Strategists at UOB Group, AUD/USD risks further pullbacks with the next support just below 0.7000 the figure.

Key Quotes

24-hour view: “While we expected AUD to weaken yesterday, we highlighted that ‘oversold conditions suggest the major support at 0.7060 could be out of reach’. In other words, we did not anticipate the plunge in AUD to 0.7024. Conditions remain oversold and while AUD could extend its decline, a break of Dec’s low near 0.6995 is unlikely for now. Resistance is at 0.7070 followed by 0.7095.”

Next 1-3 weeks: “Yesterday (27 Jan, spot at 0.7090), we noted that ‘downward momentum has improved and the focus now is at 0.7060’. That said, we did not expect 0.7060 to be breached so quickly as AUD plummeted to 0.7024 during NY session. Further AUD weakness is likely and the next support is at the Dec’s low near 0.6995. On the upside, a break of the ‘strong resistance’ at 0.7125 (level was at 0.7180 yesterday) would indicate that the weak phase in AUD that started earlier this week has run its course. Looking ahead, a break of 0.6995 would shift the focus to 0.6935.”