In opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, AUD/USD risks a breach of the key barrier at 0.7100 in the next weeks.

Key Quotes

24-hour view: “We highlighted yesterday that AUD ‘is unlikely to weaken much further’ and we expected it to ‘trade sideways between 0.7130 and 0.7230’. AUD subsequently rose to 0.7229 before dropping to a low of 0.7120. Despite the drop, downward momentum has not improved by much. That said, there is room for AUD to dip below 0.7120 but the major support at 0.7095 is unlikely to come under threat for now. Resistance is at 0.7170 followed by 0.7195.”

Next 1-3 weeks: “Our view from yesterday (26 Apr, spot at 0.7175) still stands. As highlighted, AUD is likely to weaken further and the next support is at 0.7095. Overall, only a breach of 0.7240 (‘strong resistance’ level was at 0.7270 yesterday) would indicate that the weakness that started late last week has stabilized. Looking ahead, the next support below 0.7095 is at 0.7050.”