Extra upside in store in the short term – UOB

The continuation of the upside momentum in AUD/USD seems likely in the next few weeks, note UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: While we expected AUD to edge lower last Friday, we highlighted that “any decline is unlikely to break clearly below 0.6440.” AUD did not quite threaten 0.6440, as it rebounded from a low of 0.6453. The rebound lacks momentum, but AUD could test 0.6540 before levelling off. The major resistance at 0.6585 is highly unlikely to come under threat. The current mild upward pressure is intact as long as AUD stays above 0.6460 (minor support is at 0.6480). 

Next 1-3 weeks: We continue to hold the same view as last Thursday (16 Nov, spot at 0.6510). As highlighted, while AUD is likely to advance further, upward momentum is not that strong for now, and the major resistance at 0.6585 might not come into view soon. The upside bias is intact as long as AUD stays above 0.6420 (‘strong support’ level previously at 0.6400).