Bears to test the 0.6620 target – UOB Group

The Australian Dollar (AUD) is likely to weaken further; the support at 0.6620 is likely out of reach today, UOB Group FX strategists Quek Ser Leang and Peter Chia note.

AUD to fall below 0.6620

24-HOUR VIEW: “AUD plummeted and closed sharply lower last Friday. Yesterday, we indicated that ‘while the sharp drop appears to be overdone, there is scope for AUD to dip to 0.6650 before a rebound is likely.’ We also indicated that ‘the next support at 0.6620 is unlikely to come under threat.’ In line with our view, AUD dipped to a low of 0.6648. However, there is no sign of a rebound yet. In other words, AUD is likely to weaken further today, even though the major support at 0.6620 is likely out of reach. Resistance is at 0.6675, followed by 0.6690.”

1-3 WEEKS VIEW: “When AUD was trading at 0.6675 yesterday, we highlighted that AUD ‘is likely to edge lower to 0.6620.’ We added, ‘to keep the momentum going, AUD must remain below the ‘strong resistance’ level, currently at 0.6770.’ AUD then fell to a low of 0.6648, closing at 0.6661 (- 0.15%). We continue to hold the same view as long as 0.6715 (‘strong resistance’ level was at 0.6770) is not breached. Looking ahead, a clear break below 0.6620 will shift the focus to 0.6580.”