AUD/USD remains under pressure and could retest the 0.6995 level in the near term, commented UOB Group’s FX Strategists Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We expected AUD to ‘trade between 0.7060 and 0.7160’ last Friday. AUD subsequently traded between 0.7059 and 0.7135 before dropping below 0.7060 during early Asian hours. Downward momentum has improved and AUD could decline further. That said, the major support at support at 0.6965 is unlikely to come under threat (0.6995 is already a strong support). Resistance is at 0.7070 followed by 0.7100.”

Next 1-3 weeks: “Our latest narrative was from last Friday (06 May, spot at 0.7125) where AUD could trade between 0.7030 and 0.7210. We highlighted that ‘looking ahead, AUD has to close below 0.7030 before a sustained decline is likely’. AUD closed at 0.7074 (-0.56%) before dropping sharply during early Asian. The rapid improvement in downward momentum suggests that AUD is likely to challenge the major support at 0.6995, possibly 0.6965 as well. Only a breach of 0.7140 (‘strong resistance’ level) would indicate that AUD is not ready to head lower.”