AUD/USD: Downward momentum picks up pace – UOB

In the opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, further decline in AUD/USD could shift the focus to 0.6640 in the next weeks.

Key Quotes

24-hour view: “We expected AUD to ‘trade between 0.6715 and 0.6785’ yesterday. However, AUD edged to a low of 0.6696 before closing on a soft note at 0.6701 (-0.69%). Downward momentum has improved, albeit not by much. For today, there is room for AUD to drop below 0.6680 but the next support at 0.6640 is unlikely to come under threat. Resistance is at 0.6720 but only a break of 0.6735 would indicate that AUD is not ready to head below 0.6680.”

Next 1-3 weeks: “We turned negative on AUD on Wednesday (14 Sep, spot at 0.6735) even though we were of the view that any weakness is expected to encounter solid support at 0.6680. Shorter-term downward momentum is improving quickly and a break of 0.6680 would not be surprising and would shift the focus to 0.6640. Resistance wise, a breach of 0.6770 (‘strong resistance’ level was at 0.6820 yesterday) would indicate that AUD is unlikely to weaken further.”