AUD/USD could slip back to the 0.7500 area in the next weeks, suggested FX Strategists at UOB Group.
24-hour view: “While our expectation for AUD to weaken yesterday was correct, we were of the view that ‘0.7555 is likely out of reach’. The subsequent AUD weakness exceeded our expectation as it dropped to 0.7540. While clearly oversold, the weakness in AUD has scope to move below the April’s low near 0.7530. The next support at 0.7500 is unlikely to come under threat. Resistance is at 0.7580 followed by 0.7605.”
Next 1-3 weeks: “Yesterday (17 Jun, spot at 0.7615), we indicated that ‘downside risk remains intact but it is left to be seen if AUD could weaken to the next support at 0.7555’. We underestimated the downward momentum as AUD cracked 0.7555 and dropped to 0.7540. The ease by which AUD cracked 0.7555 coupled with strong downward momentum indicates that AUD is likely to weaken further. The next level to focus on is at 0.7500. Looking ahead, a break of 0.7500 would open up the way for a move to 0.7450. On the upside, a break of 0.7625 (‘strong resistance’ level was at 0.7690 yesterday) would indicate that the downside risk that started earlier this week has run its course.”
