AUD/USD: Downward bias picks up pace – UOB

In the opinion of Economist at UOB Group Lee Sue Ann and Markets Strategist Quek Ser Leang, AUD/USD is expected to face extra downside pressure in the short-term horizon.

Key Quotes

24-hour view: “The outsized drop in AUD of 1.05% (NY close of 0.6626) came as a surprise (we were expecting AUD to trade in a range). While the rapid decline is clearly oversold, AUD could test 0.6600 before stabilization is likely. Today, the major support at 0.6565 is unlikely to come into view. The downside risk is intact as long as AUD stays below 0.6670 (minor resistance is at 0.6655).”

Next 1-3 weeks: “Our most recent narrative was from last Monday (17 Apr, spot at 0.6710), wherein ‘there is no clear direction and AUD could trade in a relatively broad range of 0.6620/0.6785 for the time being’. AUD traded within the range for more than a week until yesterday when it dropped slightly below 0.6620 (low of 0.6614). Downward momentum is beginning to build and AUD is likely to edge lower in the coming days. However, any decline is likely to face solid support at the year-to-date low near 0.6565. All in all, AUD is likely to stay under pressure as long as the ‘strong resistance’ level at 0.6700 is not breached.”