AUD/USD: Further gains likely above 0.6400 – UOB

24-hour view: We highlighted yesterday that mild upward pressure could lead to AUD rising above 0.6365. However, we held the view that “a sustained rise above 0.6365 is unlikely.” The anticipated advance exceeded our expectations as AUD rose to a high of 0.6378 before ending the day at 0.6356 (+0.33%). Today, AUD could rise further even though a sustained rise above the major resistance at 0.6400 appears unlikely (next resistance is at 0.6420). On the downside, if AUD breaks below 0.6340 (minor support is at 0.6360), it would indicate the current upward pressure has faded. 

Next 1-3 weeks: In our update from yesterday (24 Oct, spot at 0.6340), we highlighted that the current price action in AUD appears to be part of a consolidation phase between 0.6280 and 0.6400. AUD rose to 0.6378 and it continued to rise in early Asian trade today. Upward momentum has improved, but AUD has to break and stay above 0.6400 before further sustained advance is likely. The chance of AUD breaking clearly above 0.6400 will remain intact as long as it stays above 0.6280. Looking ahead, the next resistance above 0.6400 is at 0.6440.