AUD/USD sticks to the bearish view, eyes on 0.7145/60 – UOB

According to FX Strategists at UOB Group, the Aussie Dollar remains under pressure while it could visit the 0.7145/60 band vs. the greenback in the next weeks.

Key Quotes

24-hour view: “AUD rebounded from a low of 0.7166 and the major support highlighted at 0.7145 yesterday was unthreatened. While downward pressure has eased with the recovery, it is too early to expect a sustained up-move. AUD is more likely to consolidate and trade sideways from here, likely between 0.7185 and 0.7235”.

Next 1-3 weeks: “While we indicated last Friday (31 Aug, spot at 0.7265) the “the year-to-date low of 0.7203 appears to vulnerable”, the manner of which AUD sliced through this strong support was not exactly expected as it plummeted to a low of 0.7177. The break of key support coupled with the rapidly improving downward momentum suggests that the 2-weak neutral phase has ended. While we hold a bearish AUD view now, we are mindful of the long-term support zone of 0.7145/60, being the low in 2017 as well as the 10-year rising trend-line support (visible on the monthly chart). Such strong levels may not yield so easily, at least not on the first attempt. In order to maintain the current momentum, AUD has to stay below 0.7260 as a break of this ‘stop-loss’ would indicate that AUD has made a short-term bottom. Looking further out, a break of 0.7145 would shift the focus to 0.7100”.