In the opinion of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, AUD/USD faces extra retracements while below 0.6595.
Key Quotes
24-hour view: While we expected AUD to weaken yesterday, we held the view that it “is unlikely to break clearly below 0.6620”. However, in NY trade, AUD plunged to a low of 0.6599. The rapid decline appears to be overdone, but there is room for AUD to test the major support at 0.6595 before a more sustained rebound is likely. A sustained drop below 0.6595 is unlikely. Resistance is at 0.6655, followed by 0.6680.
Next 1-3 weeks: Our last detail was two days ago (July 05, spot at 0.6695) where we felt the AUD could trade in the 0.6620/0.6770 range for now. Yesterday (July 06), the AUD broke below 0.6620 and dropped to a low of 0.6599. Downward momentum appears to be building, albeit tentatively. From here, the AUD must break and remain below 0.6595 before a sustained decline is likely. AUD is unlikely to break clearly below 0.6595 but will hold as long as AUD stays below 0.6705 in the next few days. Looking ahead, the next support below 0.6595 is at 0.6520.
