AUD/USD is expected to trade within the 0.7130-0.7305 range in the next weeks, suggested FX Strategists at UOB Group.
24-hour view: “We highlighted yesterday that ‘the underlying tone has softened somewhat and this could lead to AUD edging downwards towards the bottom of the expected range of 0.7240/0.7305’. We added, ‘a sustained decline below 0.7240 is unlikely’. The subsequent weakness in AUD exceeded our expectation as it dropped to a low of 0.7224 before closing on a soft not at 0.7233 (-0.65%). Downward momentum has improved, albeit not by all that much. From here, AUD could grind lower towards 0.7200. A dip below this level is not ruled out but the next support at 0.7170 is not expected to come into the picture. Resistance is at 0.7260 followed by 0.7285.”
Next 1-3 weeks: “We highlighted on Tuesday (10 Nov, spot at 0.7275) that ‘upward momentum has waned somewhat but only a break of 0.7200 would indicate that the year-to-date high of 0.7413 is out of reach this time round’. While 0.7200 is still intact, upward momentum has waned considerably and the chance for AUD to move towards 0.7413 has dissipated. From here, AUD is deemed to have moved into a consolidation phase and is likely to trade between 0.7130 and 0.7305 for a period of time.”