AUD/USD is now seen within the 0.7030-0.7210 range amidst the ongoing mixed outlook, commented Peter Chia and Quek Ser Leang, FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the swift and sharp rally in AUD has room to extend to 0.7270 before the risk of a pullback would increase’. AUD subsequently rose to 0.7267 before plunging to a low 0.7079. The rapid decline appears to be overdone and AUD is unlikely to weaken much further. For today, AUD is more likely to trade between 0.7060 and 0.7160.”

Next 1-3 weeks: “Yesterday (05 May, spot at 0.7245), we highlighted that the recent weak phase came to an abrupt end and we held the view that ‘the outsized rally has scope to extend but is unlikely to break 0.7305’. We did not expect the reversal that sent AUD plunging by 1.95% (NY close of 0.7114). The sharp but short-lived swings have resulted in a mixed outlook. From here, AUD could trade between 0.7030 and 0.7210. Looking ahead, AUD has to close below 0.7030 before a sustained decline is likely.”