In the opinion of Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group, AUD/USD could still depreciate further and revisit the YTD low around 0.6460.
Key Quotes
24-Hour View: After the AUD fell sharply to 0.6528 on Wednesday, we highlighted yesterday that “AUD has a chance to break below 0.6500.” Our expectations did not materialize as the AUD fell to 0.6514 before recovering. Oversold conditions, combined with early signs of a slowdown, suggest low downside risk. Today, the AUD is likely to trade in a range between 0.6530 and 0.6595.
Next 1-3 weeks: We continue to hold the same view as yesterday (03 Aug, spot at 0.6535). As highlighted, while the AUD weakness that started early last week is severely oversold, AUD could weaken further to the year’s low near 0.6460. Overall, only a breach of 0.6620 (‘strong resistance’ was at 0.6635 yesterday) would indicate that AUD is not weakening further.
