AUD/USD outlook shifted to bearish – UOB

Strategists at UOB Group have shifted the outlook on AUD/USD to bearish from neutral, allowing a potential test of the mid-0.7400s in the next weeks.

Key Quotes

“The anticipated AUD weakness exceeded our expectation by taking out the major 0.7550/55 support (low of 0.7525). While the current decline is oversold, there is no sign of stabilization just yet. That said, any further weakness is unlikely to have enough momentum to move clearly below 0.7500”.

“As highlighted last Friday, a daily close below 0.7550 would shift the outlook for AUD to bearish. The condition is met and from here, we are targeting a move the 0.7440/45 low seen in September. Stop-loss is at 0.7660 even though from a shorter-term perspective, 0.7635 is already a very strong level”.