The Australian Dollar (AUD) is anticipated to trade within a narrow range of 0.6685 to 0.6735, with potential for further gains if it surpasses 0.6755, according to UOB Group analysts Quek Ser Leang and Peter Chia.
Short-Term Outlook:
The analysts observe that the AUD’s underlying tone is strengthening. “Yesterday, we noted a firming tone, with AUD potentially edging above 0.6685 but unlikely to breach the major resistance at 0.6705,” they stated. However, a sudden surge propelled AUD to a high of 0.6734, an unexpected move suggesting that the sharp rally may be overdone. For today, AUD is expected to trade sideways within the 0.6685 to 0.6735 range.
Medium-Term Outlook:
Reflecting on the past week’s movements, the analysts highlighted on July 1st that there was a “slight increase in upward momentum” for the AUD. They had previously suggested that as long as the AUD remained above 0.6610, it was likely to edge higher, though the chances of breaking the major resistance zone of 0.6705/0.6715 were initially deemed low. Following a period of sideways trading, the AUD broke through this resistance zone, reaching 0.6734, indicating a sharp rise in momentum.
Looking ahead, the analysts identify another key resistance level at 0.6755. If the AUD can surpass this level, it could continue to climb towards 0.6800. They maintain a positive outlook on the AUD’s trajectory, contingent on it remaining above the strong support level of 0.6665, revised up from 0.6625.
In summary, the Australian Dollar is set for potential gains, provided it stays above key support levels and breaks through significant resistance points.
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