As long as AUD/USD trades above the 0.6700 level, another surpass of the 0.6800 barrier should remain on the cards, suggest Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.
Key Quotes
24-Hour View: “We highlighted yesterday that ‘upward momentum has waned and this is still coupled with overbought conditions suggesting the AUD is unlikely to advance further’ and we expect the AUD to ‘trade sideways between 0.6755 and 0.6805 will do’. AUD traded in a lower range than expected (0.6747/0.6787) but our view of sideways trading was not wrong. Price action offers no new clues and AUD is likely to continue trading between 0.6745 and 0.6790.
Next 1-3 weeks: “Not much to add to our update from yesterday (May 09, spot at 0.6780). As highlighted, overbought short-term conditions may lead to a few days of consolidation at first. Unless 0.6700 (no change to the ‘firm support’ level from yesterday) is breached, AUD strength that started mid-last week is likely to extend to 0.6810.”
