Room for Australian Dollar (AUD) to advance to 0.6425 vs US Dollar (USD) before levelling off; 0.6455 is likely out of reach for now. In the longer run, AUD could advance further, potentially reaching 0.6455, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Below 0.6345, bias can turn to the downside
24-HOUR VIEW: “Yesterday, we highlighted that AUD ‘could edge lower but is unlikely to break below 0.6305.’ We were incorrect, as AUD soared and closed sharply higher by 0.88% (0.6402). While the rapid rise appears excessive, there is room for AUD to advance to 0.6425 before levelling off. The major resistance at 0.6455 is likely out of reach for now. On the downside, any pullback is likely to remain above 0.6365 (minor support is at 0.6380).”
1-3 WEEKS VIEW: “We have held a positive AUD view since early this month (as annotated in the chart below). After AUD struggled to extend its gains, we highlighted yesterday (20 Feb, spot at 0.6345) that ‘upward momentum is slowing, and a breach of 0.6305 (‘strong support’ level) would indicate AUD is likely to trade in a range instead of advancing.’ We did not quite expect AUD to surge and almost reached the technical target at 0.6410 (high has been 0.6404). The sharp increase in upward momentum indicates AUD could advance further, potentially reaching 0.6450. We will maintain our view as long as 0.6345 (‘strong support’ level previously at 0.6305) is not breached.”
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