Can decline further to 0.6650 – UOB Group

The Australian Dollar (AUD) could decline further to 0.6650; the major support at 0.6620 is likely out of reach. In the longer run, rapid increase in momentum is likely to lead to further AUD weakness; the levels to monitor are 0.6650 and 0.6620, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Levels to monitor are 0.6650 and 0.6620

24-HOUR VIEW: “We indicated yesterday that AUD ‘could retest the 0.6700 level before another rebound is likely.’ AUD subsequently dropped to 0.6698 but did not rebound. AUD closed at 0.6703 in NY trade (-0.34%) but dropped sharply in early Asian session today. Downward momentum is increasing rapidly, and AUD could continue to decline to 0.6650. The major support at 0.6620 is likely of reach today. To keep the momentum going, AUD must remain below 0.6715 (minor resistance is at 0.6700).”

1-3 WEEKS VIEW: “In our most recent narrative from last Thursday (10 Oct, spot at 0.6720), we indicated that ‘while there has been no significant increase in momentum, the bias for AUD remains on the downside.’ Yesterday, AUD dropped to a low of 0.6698. Today, it fell clearly below 0.6700. The price action has resulted in a rapid increase in momentum, and this is likely to lead to further AUD weakness. The levels to monitor are 0.6650 and 0.6620. On the upside, should AUD break above 0.6740 (‘strong resistance’ level previously at 0.6785), it would mean that the AUD weakness that started early this month has stabilised.”