AUD/USD: Expected to consolidate in a range of 0.6495/0.6555 - UOB Group

Australian Dollar (AUD) is expected to consolidate in a range of 0.6495/0.6555 against US Dollar (USD). In the longer run, downward momentum is starting to build; AUD is likely to edge lower toward 0.6460, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Downward momentum is starting to build

24-HOUR VIEW: "AUD dropped sharply to a low of 0.6485 on Monday. Yesterday (Tuesday), we pointed out that 'the sharp drop appears excessive, and AUD is unlikely to weaken much further.' We expected AUD 'to consolidate between0.6485 and 0.6535.' While AUD did not weaken further (low of 0.6491), it spiked briefly to a high of 0.6559 before retreating to close at 0.6531 (+0.59%). The price movements still appear to be part of a consolidation phase. Today, we expect AUD to trade in a range of 0.6495/0.6555."

1-3 WEEKS VIEW: "We turned neutral on AUD two days ago (07 Jul, spot at 0.6555), indicating that 'upward momentum has largely eased, and AUD is likely to trade in a range between 0.6490 and 0.6590 for the time being.' After AUD dropped to a low of 0.6390, we revised our view to negative yesterday (08 Jul, spot at 0.6515). We stated that 'downward momentum is starting to build, and we expect AUD to edge lower toward 0.6460.' Our view remains unchanged as long as 0.6585 ('strong resistance' level was at 0.6600 yesterday) is not breached."