AUD/USD neutral, further weakness unlikely – UOB

FX Strategists at UOB Group expect the pair to remain within range in the very near term, while further pullbacks seem to have lost momentum.

Key Quotes

24-hour view: “AUD traded in a muted manner last Friday and registered a rather tight range of 0.7738/0.7775 (narrower than our expected 0.7730/0.7790 consolidation range). Indicators are mostly ‘neutral’ which suggest further range trading for now, likely within a range of 0.7725/0.7785”.

Next 1-3 weeks: “After expecting it for more than a week, AUD finally ‘tested’ the 0.7730 level yesterday. This is a rather strong support and as highlighted yesterday, only a NY closing below this level would indicate that AUD has moved into a bearish phase. Despite the sharp swing higher from yesterday’s 0.7713 low, another attempt to break 0.7730 on a sustained basis is not ruled out but based on the rapidly waning shorter-term momentum, the odds for such a move are not high. That said, AUD is expected to stay under downward pressure unless it can break above 0.7820 (no change in the key resistance level)”.