AUD/USD: Extra rangebound likely near term – UOB

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In opinion of FX Strategists at UOB Group, AUD/USD is now predicted to navigate within the 0.7700-0.7780 range in the short-term horizon.

Key Quotes

24-hour view: “Our expectation for AUD to ‘test 0.7700’ did not materialize as it dropped to 0.7719 before snapping back up to 0.7764. The strong bounce appears to be running ahead of itself and AUD is unlikely to strengthen much further. For today, AUD is more likely to consolidate and trade between 0.7730 and 0.7770.”

Next 1-3 weeks: “We highlighted yesterday that ‘while shorter-term downward momentum has improved somewhat and AUD could dip below 0.7700, it has to close below 0.7680 before a sustained decline can be expected’. We added, ‘the prospect for AUD to close below 0.7680 is not high but it would remain intact as long as AUD does not move above 0.7765’. AUD subsequently dropped to 0.7719 before rebounding strongly to 0.7764. While 0.7765 is still intact, the build-up in shorter-term momentum has fizzled out and the downside risk has dissipated. In other words, AUD could continue to trade between 0.7700 and 0.7780 for now.”