Expected to trade in a 0.6195/0.6240 range – UOB Group

Australian Dollar (AUD) is expected to trade in a 0.6195/0.6240 range. In the longer run, AUD must break and remain below 0.6190 before a move to 0.6155 can be expected, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note. 

Below 0.6190, a move to 0.6155 can be expected

24-HOUR VIEW: “Following AUD sharp drop last Thursday, we highlighted on Friday that AUD ‘could continue to decline, but the major support at 0.6190 could be just out of reach.’ Our view turned out to be correct, as AUD dropped to 0.6192 before rebounding. The rebound in oversold conditions and slowing momentum, indicates that AUD is unlikely to weaken further. Today, we expect AUD to trade in a 0.6195/0.6240 range.” 

1-3 WEEKS VIEW: “When AUD was at 0.6310 last Thursday, 27 Feb, we highlighted it ‘could edge lower, but it must break clearly below 0.6280 before a move to 0.6255 can be expected.’ AUD then dropped sharply, and on Friday (28 Feb, spot at 0.6235), we stated, ‘further declines seem likely, and the level to monitor is 0.6190.’ AUD then dropped to a low of 0.6192. While declines still seem likely, AUD must break and remain below 0.6190 before a move to 0.6155 can be expected. The likelihood of AUD breaking clearly below 0.6190 will remain intact provided that the ‘strong resistance’ at 0.6285 (level was at 0.6305 last Friday) remains intact.”