Seems to have enough momentum to retest the 0.6245 – UOB Group

Australian Dollar (AUD) seems to have enough momentum to retest the 0.6245 level; the chance of a sustained rise above this level is not high. In the longer run, upward momentum is building, but AUD must close above 0.6245 before a move to 0.6300 can be expected, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.  

Upward momentum is building for AUD/USD

24-HOUR VIEW: “Although we noted ‘a slight increase in upward momentum’ yesterday, we indicated that ‘this will likely lead to a higher trading range of 0.6170/0.6215 instead of a sustained advance.’ However, instead of trading in a range, AUD soared to 0.6247, pulling back to close higher by 0.52% at 0.6227. Despite the pullback, AUD seems to have enough momentum to retest the 0.6245 level. Given the overbought conditions, the chance of a sustained rise above this major resistance is not high. Note that there is another resistance level at 0.6265. On the downside, support levels are at 0.6205 and 0.6185.”

1-3 WEEKS VIEW: “Yesterday (15 Jan, spot at 0.6190), we revised our AUD view to neutral, indicating that it ‘is expected to trade in a range, probably between 0.6130 and 0.6240.’ We did not anticipate AUD to rise above the upper end of our expected range (high has been 0.6247). Upward momentum is building, but AUD must close above 0.6245 before a sustained rise is likely. The probability of AUD closing above 0.6245 will remain intact as long as the ‘strong support’ level, currently at 0.6170, is not breached. Looking ahead, the next level to watch above 0.6245 is at 0.6300.”