AUD/USD now looks to a test of 0.7305 – UOB

The continuation of the upside momentum in AUD/USD opens the door to another visit of the 0.7300 yardstick and above in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “The rapid rise in AUD to 0.7271 yesterday came as a surprise (we were expecting AUD to consolidate). While overbought, the advance in AUD has room to test 0.7280. The major resistance at 0.7305 is unlikely to come under threat. Support is at 0.7235 followed by 0.7220.”

Next 1-3 weeks: “We highlighted yesterday (24 Aug, spot at 0.7205) that the recent weak phase in AUD has ended and we expected AUD to ‘trade between 0.7140 and 0.7265 for now’. We did not anticipate AUD to move quickly above the top of our expected range at 0.7265 (high of 0.7271 during NY session). Shorter-term upward momentum has improved and the current rebound could extend to the major resistance at 0.7305. AUD has to close above this major resistance before a sustained advance can be expected. At this stage, the prospect for AUD to close above 0.7305 is not high but it would remain intact as long as AUD does not move below 0.7180 (‘strong support’ level) within these few days.”