AUD/USD is still expected to test the 0.7450 level in the short-term horizon, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we highlighted that AUD ‘is likely to advance even though it may not be able to maintain a foothold above the major resistance at 0.7405’. We added, ‘the next resistance at 0.7450 is not expected to come into the picture’. AUD subsequently rose to 0.7427 before closing on a firm note at 0.7416 (+0.48%). The advance is deeply overbought and AUD is unlikely to strengthen much further. For today, AUD is more likely to trade between 0.7385 and 0.7430.”

Next 1-3 weeks: “We detected the build-up in upward momentum last Friday (08 Oct, spot 0.7310) and has held a positive view in AUD since then. As AUD rose strongly, we highlighted yesterday (14 Oct, spot at 0.7380) that ‘0.7405 appears to be within reach and a break of this level would open up the way for further AUD gains towards 0.7450’. AUD subsequently rose to a high of 0.7427. There is no change in our view even though AUD could consolidate for a couple of days first before heading towards 0.7450. On the downside, a break of the ‘strong support’ at 0.7350 (level was at 0.7325 yesterday) would indicate that the current positive phase has come to an end.”