AUD/USD is probably going to trade within the 0.7700-0.7830 home in subsequent weeks, noted UOB Group’s FX Strategists.
24-hour view: “While we expected AUD to strengthen yesterday, we held the view that ‘the strong resistance at 0.7770 is unlikely to return under threat’. Our view wasn’t wrong albeit AUD came on the brink of removing 0.7770 (NY high of 0.7769). Upward momentum has improved and AUD has scope to advance but the main resistance at 0.7795 is probably going out of reach (0.7780 is already quite strong resistance). Support is at 0.7745 followed by 0.7730.”
Next 1-3 weeks: “Our latest narrative was from Monday (31 May, spot at 0.7715) where we indicated that ‘downside risk has increased further but AUD has got to close below 0.7680 before a sustained decline are often expected’. We added, ‘the prospect for a sustained decline isn’t high but it might remain intact unless AUD breaks the ‘strong resistance’ level at 0.7770 within these few days’. AUD rebounded to a high of 0.7769 yesterday (01 Jun) and therefore the build-up in downward momentum has fizzled out. the present movement is viewed as a part of a consolidation and AUD is probably going to trade between 0.7700 and 0.7830.”