AUD/USD: extra gains likely above 0.6845 – UOB

In opinion of FX Strategists at UOB Group, a move beyond the 0.6845 area in AUD/USD would allow for sustained gains.

Key Quotes

24-hour view: “AUD traded between 0.6762 and 0.6798 yesterday, wider than our expected range of 0.6770/0.6800. The subsequent weak daily closing in NY (0.6766, -0.17%) has resulted in an improvement in downward momentum, albeit not by much. From here, barring a move above 0.6800, AUD could drift lower even though the strong 0.6730 support is unlikely to come under threat (minor support at 0.6740)”.

Next 1-3 weeks: “AUD rebounded strongly and swiftly after briefly dropping to 0.6678 earlier this month (07 Aug). Since then, the price action has been mixed as it traded mostly sideways within a 100 pips range (between 0.6736 and 0.6822). While the sideway trading has resulted in a loss in downward momentum, only a move above 0.6845 would indicate that AUD is ready for a sustained recovery. In other words, there are some early signs that the 0.6678 low could be a short-term bottom. Meanwhile, the outlook for the next several days is mixed and AUD could continue to trade sideways for a while more. Looking slightly ahead, a NY closing below 0.6730 would suggest that AUD is ready to tackle 0.6678 low”.