AUD/USD could still test the 0.7840 region – UOB

In opinion of FX Strategists at UOB Group, there are chances for AUD/USD to visit the 0.7840 area in the near-term horizon.

Key Quotes

24-hour view: “We highlighted yesterday that ‘despite the relatively strong advance, upward momentum has not improved by as much’ and we expected AUD to ‘edge upwards within a higher 0.7750/0.7840 range’. However, AUD plummeted to 0.7726 before rebounding to end the day on a soft note at 0.7769 (-0.48%). While the underlying tone has weakened, it is too early to expect a sustained decline. For today, AUD is likely to trade sideways, expected to be between 0.7720 and 0.7805.”

Next 1-3 weeks: “We highlighted yesterday (07 Jan, spot at 0.7795) that ‘positive phase for AUD is still intact and the next resistance above 0.7840 is a major level at 0.7900’. AUD subsequently dropped to a low of 0.7726 before recovering. While our ‘strong support’ level at 0.7700 is still intact, upward momentum has been dented. In order to rejuvenate the flagging momentum, AUD has to move and stay above 0.7805 within these few days or the odds for a move to 0.7840 would diminish quickly. Conversely, a break of 0.7700 would indicate that the positive phase in AUD that started earlier this week has ended sooner than expected.”