AUD/USD: Dwindling bets for a deeper pullback – UOB – by pabspiovano AUDUSD Currencies Majors Banks
In the view of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, the prospects for further decline in24-hour view: Last Thursday, AUD dropped to 0.6514 and then rebounded. On Friday, we highlighted, “Oversold conditions, coupled with early signs of slowing momentum, suggest low downside risk”, and we expected AUD to trade between 0.6530 and 0.6595. In NY trade, AUD dipped to 0.6541, rebounded strongly to 0.6610, and then pulled back to end the day at 0.6571 .
Next 1-3 weeks: We have held a negative AUD view for about 2 weeks now. In our most recent narrative from last Thursday , we highlighted that “while severely oversold, the weakness in AUD could extend to the year’s low near 0.6460.” On Friday, AUD rebounded to a high of 0.6610. Downward momentum is beginning to wane, and the chance of AUD dropping to 0.6460 is beginning to diminish. However, only a breach of 0.6620 would indicate that AUD is not weakening further.
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