AUD/USD: Further gains on the cards above 0.6500 – UOB

24-hour view: Yesterday, we expected AUD to trade between 0.6400 and 0.6450. AUD dipped to 0.6401 in NY trade before soaring above 0.6450 (high has been 0.6487). The rapid increase in momentum suggests AUD could break above 0.6500. As the advance is approaching overbought levels, AUD might not be able to maintain a foothold above this level. The next resistance at 0.6530 is unlikely to come into view. On the downside, if AUD breaks below 0.6440 (minor support is at 0.6460), it would indicate that the current upward pressure has eased. 

Next 1-3 weeks: Last Friday (25 Aug, spot at 0.6420), we held the view that “instead of rebounding further, AUD is more likely to trade in a range of 0.6365/0.6500 for the time being.” Yesterday, AUD rebounded to 0.6487. Upward momentum has increased, albeit not enough to suggest that AUD is ready advance in a sustained manner. In order for it to rise in a sustained manner, AUD must break and stay above 0.6500. As long as AUD stays above 0.6400 (‘strong support’) in the next few days, there is a chance for AUD to break clearly above 0.6500.