AUD/USD: Upside bias could revisit 0.7040 – UOB

In the opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, further gains in AUD/USD could reach the 0.7040 region in the next few weeks.

Key Quotes

24-hour view: “We highlighted yesterday that AUD ‘is unlikely to strengthen much further’ and we expected it to ‘trade between 0.6965 and 0.7020’. AUD subsequently traded within a lower range than expected (0.6955/0.7014) before closing largely unchanged at 0.6993 (-0.02%). The underlying tone has firmed somewhat and AUD could edge higher to 0.7020. The major resistance at 0.7040 is unlikely to come under threat. Support is at 0.6975 followed by 0.6955.”

Next 1-3 weeks: “There is no change in our view from yesterday (28 Jul, spot at 0.6990). As highlighted, while upward momentum has not improved by much, there is scope for AUD to advance further to 0.7040. At this stage, the odds for AUD to rise to the next resistance at 0.7070 are not high. On the downside, a breach of 0.6935 (no change in ‘strong support’ level from yesterday) would indicate that the current upward pressure has eased.”