Strong momentum will likely lead to further strength in the Australian Dollar (AUD); it remains to be seen whether it can break above 0.6660, note UOB Group FX analysts Quek Ser Leang and Lee Sue Ann.
The nearest resistance is at 0.6660
24-HOUR VIEW: “Yesterday, we expected the AUD to trade in a sideways range of 0.6560/0.6600. Our expectation was wrong. Instead of trading sideways, the AUD broke out, closing up sharply by 0.74% (0.6634). Although conditions are overbought, the strong momentum will likely lead to further AUD strength. However, it remains to be seen whether it can break above 0.6660. Support is at 0.6615; a break of 0.6600 would signal that the AUD is not strengthening any further.”
1-3 WEEK VIEW: “Two days ago (Aug 12, spot at 0.6570), we stated that ‘there has been a slight pick up in momentum, but not enough to suggest the start of a sustained advance.’ We were of the view that AUD ‘must break and hold above 0.6600 before a further advance can be expected.’ We were also of the view that ‘the chance of AUD clearly breaking above 0.6600 will increase in the coming days provided 0.6520 (‘strong support’ level) is not broken’ and that ‘if AUD clearly breaks above 0.6600, the next level to watch is 0.6660.’ Yesterday, the AUD not only clearly broke above 0.6600, but also soared higher, reaching a high of 0.6638. The bullish momentum has increased further, and as mentioned two days ago, the level to focus on is 0.6660. Looking ahead, the next resistance above 0.6660 is a significant level at 0.6700. On the downside, the ‘strong support’ level has risen to 0.6580 from 0.6520.
Source: Fx Street
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