Further upside could encourage AUD/USD to revisit the 0.6525 level in the short-term horizon, suggest Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group.
24-hour view: We highlighted last Friday that “the strong rebound in AUD could test 0.6455 before easing.” We added, “the major resistance at 0.6480 is unlikely to come into view. The anticipated rebound exceeded our expectations, as AUD soared to a high of 0.6501. The advance was, however, short-lived, as AUD pulled back sharply from the high. The pullback in overbought conditions suggests AUD is unlikely to advance further. Today, AUD is more likely to trade sideways between 0.6400 and 0.6475.
Next 1-3 weeks: Last Friday (29 Sep, spot at 0.6435), we held the view that AUD “is still likely trading in a range, probably between 0.6360 and 0.6480.” AUD then rebounded strongly to a high of 0.6501 before pulling back to end the day slightly higher at 0.6435 (+0.11%). There is a slight buildup in momentum, and there is room for AUD to test the major resistance level at 0.6525. At this stage, it is too early to tell if AUD can break clearly above this level. On the downside, a breach of 0.6360 (‘strong support’ level) would indicate that the momentum buildup has faded.
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