In opinion of FX Strategists at UOB Group, further upside in AUD/USD is expected to meet a strong resistance around 0.7500 in the short term.

Key Quotes

24-hour view: “The sharp and swift rally in AUD that sent it soaring to 0.7472 came as a surprise (we were expecting sideway-trading). Conditions are deeply overbought and while further AUD strength is not ruled out, a break of the major resistance at 0.7500 appears unlikely for today (there is a minor resistance at 0.7480). On the downside, a breach of 0.7415 would indicate that the current upward pressure has eased (minor support is at 0.7435).”

Next 1-3 weeks: “We have expected a stronger AUD since late last week (see annotations in the chart below). In our latest narrative from yesterday (22 Mar, spot at 0.7395), we highlighted that AUD could consolidate for a couple of days first before moving higher to 0.7440. However, AUD was in a hurry as it cracked 0.7440 and surged to a high of 0.7472 during late NY hours. While shorter-term conditions are overbought, further AUD strength appears likely. That said, 0.7500 is a weekly resistance level (see 1-3 months view below) and may not be easy to break. Looking ahead, if there is a clear break of 0.7500, it could lead to a rapid rise to 0.7555. Overall, the current AUD strength could last for a while more and only a breach of 0.7360 (‘strong support’ level was at 0.7320) yesterday would indicate that the current upward pressure has eased.”