Downward momentum improves around AUD/USD – UOB

AUD/USD seen re-visiting the 0.7175 level on a close below 0.7220, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectations for AUD to ‘trade sideways between 0.7250 and 0.7300’ was incorrect as it dropped to 0.7226 before closing on a soft note at 0.7240 (-0.64%). The slightly improved downward momentum suggests there is room for AUD to test the major support at 0.7220. For today, a sustained decline 0.7220 is unlikely. On the upside, a breach of 0.7265 would indicate that the current mild downward pressure has eased.”

Next 1-3 weeks: “While our view from Monday (27 Sep, spot at 0.7270) where AUD ‘is likely to trade between 0.7220 and 0.7330’ still stands, downward momentum is beginning to improve. However, AUD has to close below 0.7220 before further weakness towards 0.7175 can be expected. At this stage, the prospect for AUD to close below 0.7220 is not high but it would remain intact as long AUD does not move above 0.7290 within these few days.”