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United Overseas Bank’s Quek Ser Leang and Lee Sue Ann note AUD/USD remains under pressure after an impulsive decline, though oversold conditions have prompted near-term consolidation between 0.6880 and 0.6920. They turned negative on the Australian Dollar late last week and still sees scope for further downside, watching 0.6835 as major support and 0.6950 as the level that would signal stabilisation.
Impulsive slide keeps focus on 0.6835 support
“24-HOUR VIEW: AUD dropped to a low of 0.6883 two days ago before recovering. When it was at 0.6900 yesterday, we highlighted the following: “Conditions are deeply oversold, and this, combined with a tentative slowdown in momentum, suggests AUD is unlikely to weaken much further. Today, we expect AUD to trade in a range, most likely between 0.6880 and 0.6920.” However, AUD traded within a higher range of 0.6887/0.6927. The price action provides no fresh clues, and we continue to expect AUD to trade in a range between 0.6880 and 0.6920.”
“1-3 WEEKS VIEW: We turned negative on AUD late last week. In our most recent narrative from two days ago (24 Jun, spot at 0.6900), we indicated that while the impulsive decline earlier this week “suggests further AUD downside, it remains to be seen if the major weekly support at 0.6835 is within reach during this phase of weakness.” We continue to hold the same view. Overall, only a breach of 0.6950 (‘strong resistance’ was at 0.6960 yesterday) would indicate that the decline is stabilising.”
