Further downside in AUD/USD could visit the sub-0.7100 area in the next weeks, comment FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.
Key Quotes
24-hour view: “We expected AUD to weaken yesterday but we were of the view that ‘deeply oversold conditions suggest that the next support at 0.7165 is likely out of reach’. We underestimated the weakness in AUD as it cracked 0.7165 and dropped to 0.7135 before rebounding. Conditions remain oversold and downward momentum is showing tentative signs of slowing. AUD is unlikely to weaken much further. For today, AUD is more likely to trade sideways between 0.7130 and 0.7230.”
Next 1-3 weeks: “Yesterday (25 Apr, spot at 0.7230), we highlighted that there is room for the sharp decline in AUD to extend to 0.7165. We added, a break of this strong support could lead to further sharp drop. AUD subsequently cracked 0.7165 and dropped to 0.7135. AUD is likely to weaken further and the next support is at 0.7095. Overall, only a breach of 0.7270 (‘strong resistance’ level was at 0.7330 yesterday) would indicate that the current weakness has stabilized.”