In opinion of FX Strategists at UOB Group, the upside momentum in AUD/USD is seen facing a tough barrier around the 0.7820 region in the next weeks.
Key Quotes
24-hour view: “We did not anticipate the sharp but short-lived plunge in AUD to 0.7701 and the subsequent swing back up to 0.7788. The rapid rise appears to be overstretched but there is room for further advance in AUD. That said, the major resistance at 0.7820 is likely out of reach (0.7800 is already quite a strong level). Support is at 0.7760 followed by 0.7745.”
Next 1-3 weeks: “We have held the same view since Monday (03 May, spot at 0.7725) where we indicated that the outlook is mixed, and we expected AUD to ‘trade within a 0.7660/0.7785 range’. After trading within the range for a few days, AUD edged above the top of the expected range yesterday (high of 0.7788). Shorter-term upward momentum is beginning to improve and AUD is expected to trade with an upward bias from here. However, the April’s top near 0.7820 is expected to offer solid resistance. Overall, only a break of 0.7720 (‘strong support’ level) would indicate that the buildup in momentum has dissipated.”