AUD/USD: Door open to a visit to 0.7225 – UOB

Further downside in AUD/USD could reach the 0.7225 level in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “The sharp drop in AUD to 0.7274 yesterday came as a surprise (we were expecting AUD to trade sideways). While the rapid decline appears to be running ahead of itself, there is room for AUD to weaken further. That said, any weakness is expected to encounter solid support at 0.7260 (minor support is at 0.7275). Resistance is at 0.7310 followed by 0.7325.”

Next 1-3 weeks: “Two days ago (15 Sep, spot at 0.7325), we highlighted that ‘improvement in downward momentum suggests that AUD is likely to trade with a downward bias towards 0.7260’. AUD dropped to 0.7274 during NY session yesterday and further AUD weakness appears likely. A break of the solid support at 0.7260 would suggest that AUD could weaken further to 0.7225. Overall, AUD is expected to stay under pressure unless it moves above 0.7345 (‘strong resistance’ level previously at 0.7380).”