AUD/USD bearish below 0.7860 – UOB

In light of the recent price action, AUD/USD’s outlook should turn bearish on a daily close below 0.7860, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that a “break of 0.7860 could lead to a quick drop to 0.7830”. The 0.7830 ‘target’ was not met as AUD rebounded quickly after touching a low of 0.7835. Downward momentum has eased and AUD has likely moved into a consolidation phase. In other words, AUD is expected to trade sideways from here, likely between 0.7855 and 0.7930”.

Next 1-3 weeks: “AUD touched a low of 0.7835 yesterday before rebounding strongly to close higher for the first time in 6-day. The NY closing of 0.7906 is well above our bearish ‘trigger level’ of 0.7860 and for now, we continue to hold a neutral view for this pair. While the recent weak undertone has stabilized somewhat, the risk is tilted to the downside and only a move back above 0.7980 would indicate that the immediate downward pressure has eased. Until then, a NY closing below 0.7860 is not ruled out and would indicate the start of a bearish phase (with an immediate target of 0.7805)”.