AUD/USD faces upside risks in the near term – UOB

In the opinion of Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group, AUD/USD could extend the current advance to the area beyond the 0.6800 hurdle in the near term.

Key Quotes

24-hour view: “While we expected AUD to rise yesterday, we underestimated the pace of advance as it surged to a high of 0.6797 (we were of the view that AUD is unlikely to challenge the major resistance at 0.6760). Not surprisingly, upward momentum is strong and AUD could continue to advance. However, severely overbought conditions suggest that AUD might not be able to break clearly above 0.6820 today. Overall, only a breach of 0.6730 (minor support is at 0.6760) would indicate that AUD is not advancing further.”

Next 1-3 weeks: “Our most recent narrative was from Monday (10 Apr, spot at 0.6670) wherein we held the view that AUD ‘is likely to trade in a range of 0.6600/0.6760 for the time being’. Yesterday (13 Apr), AUD lifted off and surged above 0.6760 (high has been 0.6797). The rapid improvement in momentum suggests AUD is likely to advance further. Resistance is at 0.6820, followed by a rather strong level at 0.6860. The upside risk is intact as long as AUD stays above 0.6700 in the next few days.”