The Australian Dollar (AUD) is anticipated to fluctuate within a narrow range of 0.6515 to 0.6565. According to UOB Group FX strategists Quek Ser Leang and Lee Sue Ann, a breach above 0.6565 would indicate a stabilization of the recent weakness observed in the currency.
Short-Term Outlook: AUD to Remain Range-Bound
24-Hour View: Following a sharp decline in early Asian trading yesterday, the strategists noted that the drop appeared somewhat overdone. They maintained that unless the AUD breached 0.6540, it could fall below the significant support level at 0.6480. The AUD reached a low of 0.6480 but did not break through, subsequently rebounding to a high of 0.6555. With the downward pressure quickly dissipating, the AUD is expected to trade within the 0.6515 to 0.6565 range today.
Medium-Term Outlook: Stabilization Signs Emerging
1-3 Weeks View: The strategists have held a negative outlook on the AUD for the past two weeks. After the sharp decline yesterday, where the AUD hit 0.6510, they noted that the decline seemed overextended, casting doubt on whether the currency would reach 0.6425. The AUD then dropped to the short-term support level at 0.6480 before rebounding strongly. Moving forward, if the AUD surpasses the strong resistance level of 0.6565, it would suggest that the recent weakness in the currency has stabilized.
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