A move to 0.6355 in the AUD/USD pair can be expected, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Risk seems to be on the downside
24-HOUR VIEW: “AUD dropped to 0.6446 last Thursday and then rebounded. Last Friday, when AUD was at 0.6485, we indicated that ‘instead of continuing to decline, AUD is more likely to trade sideways today, probably in a range of 0.6460/0.6510.’ However, AUD dipped to a low of 0.6449 and closed at 0.6452. Today, AUD opened with a gap lower before recovering. There has been an increase in downward momentum, but while the risk is on the downside, AUD may not have sufficient momentum to break below 0.6400. On the upside, resistance is at 0.6465, and if AUD breaks above 0.6480, it would indicate that the downward pressure has eased.”
1-3 WEEKS VIEW: “We have expected AUD to trade in a range since the middle of the month. Tracking the subsequent price movements, we highlighted last Friday (20 Jun, spot at 0.6485) that ‘while further range trading still seems likely, a tighter 0.6430/0.6550 range should be sufficient to contain price movements for now.’ Although AUD broke below 0.6430 on the opening today, it must close below this level before a move to 0.6355 can be expected. The likelihood of AUD closing below 0.6430 will remain in place, as long as the ‘strong resistance’ level, currently at 0.6505, is not breached.”
