AUD/USD remains under pressure and risks a drop to 0.7060 in the next weeks, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “We did not anticipate the sharp drop in AUD to 0.7095 during NY session. AUD extended its decline during Asian hours and strong downward momentum suggests further weakness. That said, oversold conditions suggest the major support at 0.7060 could be out of reach. Resistance is at 0.7120 followed by 0.7145.”
Next 1-3 weeks: “We have expected AUD to weaken since Monday (24 Jan, spot at 0.7180). After AUD plummeted to 0.7091, we highlighted on Tuesday (25 Jan, spot at 0.7150) that the rapid drop appears to be overdone but the downside risk remains intact. We added, any weakness is expected to encounter solid support at 0.7090. AUD dropped to 0.7095 during NY session and extended its decline as it took out 0.7090 during Asian hours. Downward momentum has improved and the focus now is at 0.7060. A break of this level could lead to further AUD weakness to 0.7030. On the upside, a break of the ‘strong resistance’ at 0.7180 (level was at 0.7225 yesterday) would indicate that the downside risk has dissipated.”