AUD/USD to test 0.6510 before leveling off - UOB Group

Sharp rise appears excessive, but there is room for Australian Dollar (AUD) to test 0.6510 before leveling off. In the longer run, price action suggests AUD could continue to rise and test the significant resistance level at 0.6540, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

AUD may continue to rise

24-HOUR VIEW: "While we expected AUD to 'edge higher' yesterday, we indicated that 'any advance is likely limited to a test of 0.6465.' We also indicated that 'the major resistance at 0.6485 is not expected to come under threat.' Our directional call was correct, but we did not anticipate the sharp advance as AUD surged and broke above both 0.6465 and 0.6485, reaching a high of 0.6500. The sharp rise appears excessive, but there is room for AUD to test 0.6510 before leveling off. The major resistance at 0.6540 is unlikely to come under threat. On the downside, support levels are 0.6475 and 0.6460."

1-3 WEEKS VIEW: "In our most recent narrative from last Thursday (28 May, spot at 0.6420), we highlighted that 'for the time being, AUD is expected to trade in a range of 0.6380/0.6485.' Yesterday, AUD broke decisively above 0.6485. The price action suggests AUD could continue to rise and test the significant resistance level at 0.6540. On the downside, should AUD break below 0.6430, it would mean that it is not ready to head higher just yet."