AUD / USD is facing a further decline, but a move to levels below 0.7005 seems unlikely at the moment, suggested currency strategists at UOB Group.
24-hour outlook: “Our expectation that” there is room for the AUD to move to 0.7045 first before current weakness stabilizes “did not materialize as the AUD traded quietly and within a relatively tight range between 0.7071 and 0.7100. The underlying tone has strengthened and today’s bias is to the upside. That said, any advance is likely to be limited to a test at 0.7135 (next resistance is at 0.7165). Support is at 0.7075 followed by 0.7050 “.
Next 1-3 weeks: “The sudden and sharp drop in the AUD yesterday to a low of 0.7057 was a surprise (we expected the AUD to trade within a wide range of 0.7080 / 0.7230). The rapid improvement in bearish momentum indicates that the AUD could weaken further even though the odds of a break from last month’s low near 0.7005 are not high. In general, AUD expected to trade weak unless it can move above 0.7165 ‘strong resistance’ level“.
Credits: Forex Street