Australian Dollar (AUD) could continue to rise vs US Dollar (USD), but any advance is unlikely to reach 0.6515; there is another resistance level at 0.6475. In the longer run, renewed momentum has increased the odds of AUD breaking above 0.6515, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
AUD has a chance to continue to rise
24-HOUR VIEW: “Our view for AUD to ‘trade between 0.6390 and 0.6440’ yesterday was incorrect, as it soared to 0.6465, closing on a strong note at 0.6458 (+0.84%). Conditions are overbought, but strong momentum suggests AUD could continue to rise. However, any advance is unlikely to reach 0.6515. Note that there is another resistance level at 0.6475. Support levels are 0.6440 and 0.6420.”
1-3 WEEKS VIEW: “Last Wednesday (14 May), when AUD was at 0.6470, we indicated that ‘To continue to rise, AUD must break and hold above 0.6515.’ After AUD retreated, we indicated last Friday (16 May, spot at 0.6405) that ‘a breach of 0.6370 would mean that the current price movements are likely part of a range trading phase.’ Yesterday, AUD rose to 0.6465. The renewed upward momentum has increased the odds of AUD breaking above 0.6515. On the downside, the ‘strong support’ level has moved higher to 0.6400 from 0.6370.”