AUD/USD focus shifted to the upside – UOB

Further gains in the Aussie dollar are seen lifting AUD/USD to the 0.6570 region in the next weeks, in opinion of FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted last Friday that AUD “could strengthen further” and added, “overbought conditions suggest that a break of 0.6570 is unlikely”. AUD subsequently rose to 0.6547 before ending the day on a firm note 0.6533. Despite the firm closing, conditions remain overbought and while AUD could edge higher from here, a break of 0.6570 still appears unlikely for now (next resistance is at 0.6600). On the downside, a breach of 0.6495 (minor support is at 0.6510) would indicate that the current upward pressure has eased.”

Next 1-3 weeks: “The sudden and outsized gain of +1.44% (NY close of 0.6497) yesterday was unexpected. The risk has shifted quickly to the upside towards last month’s top at 0.6570. This level is acting as a solid resistance and AUD has post a daily closing above this level before further sustained advance can be expected. At this stage, the prospect for such a scenario is not that high but it would continue to increase as long as AUD does not move below 0.6435 within these few days.”