AUD/USD potential for a test of 0.7600 – UOB

FX Strategists at UOB Group stay neutral on the Aussie Dollar, although a visit to 0.76 in the near term appears unlikely for now.

Key Quotes

24-hour view: “The anticipated weakness exceeded our expectation by a wide margin as a break of the strong 0.7695/00 support sent AUD tumbling to a low of 0.7655. From here, market is likely ‘attracted’ by last month’s low of 0.7643 and while a break of this level would not be surprising, a move below the next support at 0.7625 seems unlikely (this level is followed by a long-term support at 0.7600). Overall, only a move back above 0.7705 would suggest that a short-term low is in place (minor resistance is at 0.7685)”.

Next 1-3 weeks: “While we noted last Friday that the “near-term bias is on the downside” and “any weakness is viewed as part of a 0.7645/0.7785 consolidation range”, the subsequent pace of the decline was more rapid than anticipated as AUD hit a low of 0.7655. For now, we continue to hold the same view and while an intraday dip below 0.7645 would not be surprising, we not expect the next major support at 0.7600 to come into the picture for now. However, the current mild downward pressure is expected to improve further unless AUD can surmount the ‘key resistance’ at 0.7735 from here”.