AUD/USD risks a breakdown of the 0.7800 handle – UOB

According to FX Strategists at UOB Group, the decline in the Aussie Dollar could extend to the 0.7800 handle in the near term.

Key Quotes

“AUD extended its decline yesterday and touched a low of 0.7836. The sharp decline from last week has moved into oversold territory and is approaching the major support at 0.7805/10 (low in August)”.

“We have been bearish since last Friday and those who are short from 0.7930 may like to exit half of their position at 0.7820, just ahead of the major support”.

“A break below 0.7805/10 is not ruled out but based on the oversold conditions, this level is unlikely to yield so easily. On the upside, only a move back above 0.7930 (stop-loss adjusted lower from 0.7960) would indicate that a temporary low is in place. Looking further ahead, a break below 0.7805/10 would shift the focus to 0.7740”.