The Australian Dollar (AUD) shows signs of potential recovery after recent sharp declines, but any upward movement is anticipated to encounter significant resistance around 0.6580. According to UOB Group FX analysts Quek Ser Leang and Peter Chia, the recent weakness in the AUD appears to be overstretched in both time and price, suggesting that stabilization will only be achievable with a break above the 0.6615 threshold.
Short-Term Forecast: Rebound Possible but Limited
24-Hour View: The AUD experienced a substantial drop two days ago, with further decline reaching 0.6511 before a rebound. Despite the oversold conditions indicating room for a potential recovery, any upward movement is expected to meet strong resistance at 0.6580, with minor resistance at 0.6560. Immediate support levels are positioned at 0.6525 and 0.6510. The outlook remains cautious, as the currency’s recent fall surpassed initial expectations.
1-3 Weeks Outlook: On July 25, when the AUD was at 0.6575, it was noted that the currency’s outlook was negative, with a key level to watch being 0.6530. The AUD then dropped to 0.6511, suggesting that the current weakness may be excessive. However, the analysts assert that stabilization or a reversal of this trend would require a breach of the 0.6615 resistance level. Should this resistance hold, there remains a slight possibility of further decline towards 0.6480. The previously noted ‘strong resistance’ was at 0.6630, and as long as this resistance is not surpassed, further AUD weakness remains a potential scenario.
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