The strong bounce appears to be overdone, but there is a chance that the Australian Dollar (AUD) tests 0.6700 before a pause is likely. Long term, there has been a slight increase in bullish momentum; AUD could gradually rise and test 0.6720, say UOB Group FX analysts Quek Ser Leang and Peter Chia.
AUD may gradually rise and test 0.6720
24 HOURS VIEW: “The AUD fell sharply to 0.6513 two days ago, and then rebounded. Yesterday, when the AUD was at 0.6570, we indicated that ‘The rebound from the low has resulted in a slowdown in momentum.’ We added, ‘Instead of weakening further, AUD is likely to trade in a range of 0.6530/0.6610.’ The AUD did not weaken further, but instead of trading in a range, it shot up to a high of 0.6688, closing on a strong note at 0.6681, up 1.69% on the day. The strong rebound appears to be overdone, but. there is a chance that AUD tests 0.6700 before a pause is likely. A sustained rise above 0.6700 is unlikely. On the downside, a break of 0.6620 (minor support is at 0.6645) would mean current bullish pressure. has vanished.”
1-3 WEEK VIEW: “We noted yesterday (Nov 7, pair at 0.6570), that despite the AUD falling to a low of 0.6513 two days ago, ‘there has been no significant increase in momentum.’ While we maintained the view that ‘there is potential for the AUD to fall to 0.6500,’ we indicated that ‘the probability of a sustained break below this level is not high.’ We did not anticipate the subsequent strong reversal as AUD spiked and broke above our ‘strong resistance’ level at 0.6640 (high 0.6688). strong advance. That said, there is room for AUD to gradually rise, but any advance will likely be limited to a test of 0.6720. We will maintain our view as long as AUD remains above 0.6590.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
