AUD/USD: Likely to trade between 0.6385 and 0.6555 - UOB Group

Overbought advance in Australian Dollar (AUD) could test 0.6505 before leveling off against US Dollar (USD); 0.6555 is not expected to come into view. In the longer run, current price movements are likely part of a broad range trading phase between 0.6385 and 0.6555, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Current price movements are likely part of a broad range

24-HOUR VIEW: "While we highlighted yesterday that "the risk for AUD is on the downside", we indicated that it 'may not have sufficient momentum to break below 0.6400.' Our assessment was incorrect, as AUD broke below 0.6400 and reached a low of 0.6373, before surging to close 0.13% higher at 0.6460. While overbought, the advance could test 0.6505 before leveling off. The major resistance at 0.6555 is not expected to come into view. Support is at 0.6440, followed by 0.6415."

1-3 WEEKS VIEW: "Last Friday (20 Jun, spot at 0.6485), we indicated that 'while further range trading still seems likely, a tighter 0.6430/0.6550 range should be sufficient to contain price movements for now.' After AUD broke below 0.6430 in the early Asian trading yesterday, we indicated that 'although AUD broke below 0.6430 on the opening today, it must close below this level before a move to 0.6355 can be expected.' We added, 'the likelihood of AUD closing below 0.6430 will remain in place, as long as the 'strong resistance' level, currently at 0.6505, is not breached.' AUD then dropped to 0.6373 before soaring to close at 0.6460. Although our 'strong resistance' level has not been breached yet, the downward momentum has largely faded with the sharp rise. To put it another way, the current price movements are likely part of a broad range trading phase, probably between 0.6385 and 0.6555."