Extra gains in AUD appear to have lost traction – UOB

In view of FX Strategists at UOB Group, the upside momentum in the Aussie Dollar seems to have run out of steam in the near term.

Key Quotes

24-hour view: “We expected AUD to trade sideways between 0.6845 and 0.6885 yesterday. However, AUD dropped to 0.6831 before rebounding strongly to end the day unchanged at 0.6865 (0.0%). The rapid swing has clouded the short-term outlook and we continue to expect AUD to trade sideways for today, likely between 0.6845 and 0.6885”.

Next 1-3 weeks: “We have held the same view since last Tuesday (10 Sep, spot at 0.6865) wherein AUD “is ready to tackle 0.6910”. After touching 0.6895 last Thursday (12 Sep), AUD has not been able to make much headway. The quiet consolidation over the past several days has resulted in a rapid loss in momentum and unless AUD can ‘punch’ above 0.6900 within the next 24 to 48 hours, a break of 0.6825 (no change in strong support level) would not be surprising. In other words, the odds for further AUD strength have diminished and a break of 0.6825 would indicate that 0.6895 is the extent of the recovery phase that started earlier this month”.