The 0.6685 level might me beyond reach – UOB Group

Australian Dollar (AUD) appears to have entered a consolidation phase between 0.6605 and 0.6645. In the longer run, further AUD strength is not ruled out; it remains to be seen if 0.6685 is within reach, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Further AUD strength is not ruled out

24-HOUR VIEW: “AUD rose to a high of 0.6649 last Friday. Yesterday, when AUD was at 0.6635 in the early Asian session yesterday, we stated that ‘negative divergence is starting to form on momentum indicators, and AUD is unlikely to rise much further’. We held the view that AUD ‘is more likely to trade in a higher range of 0.6625/0.6655’. AUD subsequently traded between 0.6614 and 0.6649. AUD appears to have entered a consolidation phase, likely between 0.6605 and 0.6645. 1-3 WEEKS VIEW: “We have held a positive AUD view since late last month. Last Thursday (04 Dec, spot at 0.6600), we held the view that AUD ‘could potentially rise to 0.6650’. After AUD rose to a high of 0.6649, we highlighted yesterday (08 Dec, spot at 0.6635) that ‘while further AUD strength is not ruled out, the advance that started late last month appears to be overstretched, and it remains to be seen whether momentum is strong enough to reach the next resistance at 0.6685’. We will continue to hold the same view as long as 0.6590 (no change in ‘strong support’ level) holds.”