Very likely to retest the 0.6680 level – UOB Group

Australian Dollar (AUD) could retest the 0.6680 level before a recovery can be expected; any further decline is unlikely to reach 0.6655. In the longer run, the current price movements are likely part of a range-trading phase between 0.6655 and 0.6745, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Current price movements are likely part of a range-trading phase

24-HOUR VIEW: “We expected AUD to ‘consolidate between 0.6705 and 0.6745’ yesterday. However, instead of consolidating, AUD dropped to a low of 0.6682. Despite the decline, downward momentum only increased slightly. Today, AUD could retest the 0.6680 level before a recovery can be expected. While a break below 0.6680 is not ruled out, based on the current momentum, any further decline is unlikely to reach 0.6655. Resistance levels are at 0.6715 and 0.6730.”

1-3 WEEKS VIEW: “Two days ago (07 Jan, spot at 0.6730), we indicated that AUD ‘could edge higher’. However, we noted that ‘it remains to be seen if it can reach 0.6770’. After AUD rose to 0.6766 and pulled back, we noted yesterday that ‘while upward momentum has eased somewhat with the pullback, we will maintain our view as long as AUD holds above 0.6690 (‘strong support’ level)’. AUD subsequently broke below 0.6690 (low of 0.6682). The buildup in momentum has faded, and the current price movements are likely part of a range-trading phase between 0.6655 and 0.6745.”