AUD/USD has likely moved into a consolidative phase – UOB

In opinion of FX Strategists at UOB Group, AUD/USD is now expected to navigate within the 0.7150-0.7275 range in the next weeks.

Key Quotes

24-hour view: “We expected AUD to ‘trade between 0.7150 and 0.7205’ yesterday. While AUD subsequently traded close to our expected range (0.7155/0.7213), it settled on a firm footing at 0.7211 (+0.51%). Upward momentum is beginning to build even though any further advance in AUD is expected to face strong resistance at 0.7235 (next resistance at 0.7275 is not expected to come under threat). On the downside, a breach of 0.7170 (minor support is at 0.7190) would indicate that the build-up in momentum has fizzled out.”

Next 1-3 weeks: “Last Friday, (07 Jan, spot at 0.7165) we highlighted that risk is tilted to the downside but any weakness in AUD is expected to encounter solid support at 0.7110. Since then, AUD has not been able to make any headway on the downside. While our ‘strong resistance’ level at 0.7235 is not breached, the firm daily closing of 0.7211 (+0.51%) suggests that the downside risk has more or less dissipated and AUD could trade between 0.7150 and 0.7275 for now.”