AUD/USD: A breach of 0.6300 seems not favoured – UOB

In the opinion of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, a drop below the 0.6300 mark in AUD/USD appears unlikely for the time being.

Key Quotes

24-hour view: We highlighted yesterday that “there is still a change for AUD to test 0.6340.” Our view did not materialise as it continued to trade in a quiet manner between 0.6363 and 0.6394 before closing largely unchanged (0.6377, -0.09%). Momentum indicators are turning ‘flat’, and AUD could continue to trade in a range, probably between 0.6355 and 0.6400. 

Next 1-3 weeks: Our latest narrative was from two days ago (06 Sep, spot at 0.6375), wherein we highlighted that “while further AUD weakness appears likely, the likelihood of it breaking clearly below 0.6300 is not high.” AUD traded in a relatively quiet manner over the past couple of days. We continue to hold the same view for now. On the upside, if AUD breaks above 0.6430 (no change in the ‘strong resistance’ level from yesterday), it would indicate that AUD is not weakening further.