Scope for additional Australian Greenback (AUD) power towards the US Greenback (USD), however any advance is probably going half of a better vary of 0.6420/0.6515. Within the longer run, to proceed to rise, AUD should break and maintain above 0.6515, UOB Group’s FX analysts Quek Ser Leang and Peter Chia notice.
AUD should break and maintain above 0.6515 to rise
24-HOUR VIEW: “We famous ‘a slight enhance in downward momentum’ yesterday, and we anticipated AUD to ‘take a look at 0.6350.’ We highlighted that ‘the most important help at 0.6330 is unlikely to return underneath risk.’ AUD then dipped to 0.6362 earlier than staging a surprisingly sharp rally, reaching a excessive of 0.6479. Robust momentum suggests there’s scope for additional AUD power. Nevertheless, overbought situations point out that any advance is probably going half of a better 0.6420/0.6515 vary. In different phrases, AUD is unlikely to interrupt clearly above final week’s excessive of 0.6515.”
1-3 WEEKS VIEW: “Our most up-to-date narrative was from final Friday (09 Could), when AUD was at 0.6400. Within the replace, we indicated that ‘the rise in momentum will not be sufficient to counsel a sustained decline simply but, and AUD should break and maintain beneath 0.6370 earlier than a transfer to 0.6330 might be anticipated.’ Whereas AUD subsequently dropped beneath 0.6370, it didn’t shut beneath this stage. Yesterday, AUD rallied, closing at 0.6472, up sharply by 1.57%. The breach of our ‘robust resistance’ stage of 0.6460 signifies that the possibility of AUD breaking decrease has dissipated. After the sharp rally, upward momentum has strengthened, however this time round, it isn’t sufficient to point a sustained rise. To proceed to rise, AUD should break and maintain above 0.6515. The possibility of AUD breaking clearly above 0.6515 will enhance within the subsequent few days, offered that the ‘robust help’ stage, at the moment at 0.6370, will not be breached.”
