Following the recent price action, additional gains appear on the table for AUD/USD on the near-term horizon, according to Market Strategist Quek Ser Leang and Economist Lee Sue Ann of UOB Group.
Additional comments
24-hour outlook: The sudden rise in AUD/USD that took it to a high of 0.6513 was a surprise (we expected it to trade sideways). The excessive and rapid rise is greatly overblown, and AUD/USD is unlikely to rise much further. Today, AUD/USD is most likely to trade in a range, probably between 0.6440 and 0.6525.
Next 1-3 weeks: Yesterday, AUD/USD skyrocketed and surpassed our “strong resistance” level at 0.6440. The break of 0.6440 has invalidated our view that AUD/USD “is likely to trade with a bearish bias towards 0.6300”. Although bullish momentum has increased following yesterday’s strong rally, AUD/USD needs to break above 0.6525 before a further sustained advance to 0.6585 is likely. It seems very likely that AUDAUD/USD breaks clearly above 0.6525. On the downside, a break of 0.6400 (“strong support” level) would mean AUD/USD is not ready to break above 0.6525.
Source: Fx Street
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