The current price movements are likely part of a 0.6570/0.6615 consolidation phase. In the longer run, short-term momentum has eased slightly; AUD may still move to 0.6645, but the odds are not high, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
AUD may still move to 0.6645
24-HOUR VIEW: “Two days ago, we expected AUD to strengthen. After it rose more than we expected, we pointed out yesterday that ‘while AUD could continue to rise today, deeply overbought conditions suggest any advance may not reach 0.6625.’ However, AUD reached a high of 0.6525 before easing to close lower by 0.19% (0.6591). The current price movements are likely part of a consolidation phase, probably between 0.6570/0.6615.”
1-3 WEEKS VIEW: “We revised our view to positive two days ago (23 Jul, spot at 0.6550), indicating that AUD ‘could edge higher toward 0.6575.’ After AUD soared quickly above 0.6575, we indicated yesterday (24 Jul, spot at 0.6600) that ‘the rapid increase in momentum is likely to lead to further advance to 0.6625, potentially reaching 0.6645.’ AUD subsequently rose to 0.6625 before retreating. While short-term momentum has eased slightly, AUD may still move to 0.6645, but the odds are not high. On the downside, a break of 0.6545 (‘strong support’ level was at 0.6530 yesterday) would mean that 0.6645 is out of reach.”