Scope for AUD to test 0.6405 – UOB Group

Further range-trading appears likely; firmer underlying tone suggests a higher range of 0.6445/0.6485. In the longer run, the price action suggests there is scope for AUD to test 0.6405, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Further range-trading appears likely

24-HOUR VIEW: “Last Friday, AUD dropped to a low of 0.6422 and then rebounded. Yesterday, we pointed out that ‘the rebound amid slowing momentum suggests that, instead of continuing to weaken, AUD is more likely to range-trade today, probably between 0.6440 and 0.6480’. Our view of range-trading was not wrong, even though AUD traded in a narrower range than expected (0.6442/0.6470). Further range-trading appears likely, but the firmer underlying tone suggests AUD is likely to trade in a higher range of 0.6445/0.6485.”

1-3 WEEKS VIEW: “We turned negative on AUD early last week. Tracking the subsequent decline, we highlighted last Friday (21 Nov, spot at 0.6450) that ‘the price action suggests AUD could test 0.6405’. Although downward momentum has slowed somewhat, we will continue to hold the same view as long as the ‘strong resistance’ at 0.6510 (no change in level from last Friday) is not breached.”