Further sideways trading in Australian Dollar (AUD) vs US Dollar (USD) appears likely, probably in a range of 0.6480/0.6520. In the longer run, bias remains on the upside, but it remains to be seen if AUD can break clearly above 0.6555, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
AUD may not break above 0.6555
24-HOUR VIEW: “AUD rose to a high of 0.6538 last Thursday. On Friday, when it was at 0.6510, we indicated that ‘although there is still no significant increase in upward momentum, AUD could test 0.6540 before the risk of a more sizeable pullback increases.’ Our expectations did not materialise, as AUD traded sideways between 0.6580 and 0.6517. Momentum indicators are mostly flat, and further sideways trading appears likely today, probably in a range of 0.6480/0.6520.”
1-3 WEEKS VIEW: “Last Tuesday (03 Jun, spot at 0.6490), we highlighted that the recent ‘price action suggests AUD could continue to rise and test the significant resistance level at 0.6540.’ After AUD rose to 0.6538, we highlighted on Friday (06 Jun, spot at 0.6510) that ‘the bias remains on the upside, but it remains to be seen if AUD can break clearly above 0.6555.’ We will maintain our view as long 0.6455 (no change in ‘strong support’ level) is not breached.”