In the view of UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia, further retracement in AUD/USD appears on the table while below 0.6630.
Key Quotes
24-Hour View: “We indicated last Friday that ‘downside pressure has eased somewhat but the AUD could drop back towards the 0.6600 level before a more sustained recovery is likely’. However, after falling to 0.6618, the AUD bounced back to a high of 0.6675 and then closed at 0.6651 (+0.45%). Downward pressure has eased and the AUD has likely entered a consolidation phase. Today, AUD is likely to trade sideways between 0.6630 and 0.6680.”
Next 1-3 Weeks: “In our latest detail from last Friday (May 19, spot at 0.6630), we noted that ‘downward momentum has not improved much’ but we see an opportunity for the AUD to drop to 0.6575. AUD fell to 0.6618, rebounded and then closed at 0.6651 (+0.45%). Short-term downside momentum is starting to ease and the AUD needs to break and stay below 0.6630 in the next 1-2 days or the chances of it going down further to 0.6575 will fade. Conversely, a clear breach of 0.6685 (no change to the ‘strong resistance’ level since last Friday) would indicate that the AUD is not weakening further.”
