AUD/USD remains poised to extend the ongoing downtrend in the near term, according to FX Strategists at UOB Group.
24-hour view: “We expected AUD to ‘trade sideways between 0.7185 and 0.7225’ yesterday. AUD subsequently traded between 0.7181 and 0.7208 before breaking 0.7170 during early Asian hours. Downward momentum has improved and AUD is likely to weaken further. However, any further weakness is expected to encounter strong support at 0.7140. Resistance is at 0.7185 followed by 0.7200.”
Next 1-3 weeks: “Yesterday (25 Aug, spot at 0.7205), we highlighted that ‘a breach of 0.7170 would not be surprising but it is left to be seen if AUD could maintain a foothold below this level’. AUD cracked 0.7170 during early Asian hours and the rapid improvement in downward momentum suggests that there is room for AUD to weaken further. That said, it is too early to tell if AUD could move to the year-to-date low near 0.7105 (there is a rather strong support level at 0.7140). Overall, only a breach of 0.7235 (‘strong resistance’ level was at 0.7255 yesterday) would indicate that the current weakness has stabilized.”
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