Extra upside could lift AUD/USD to the area above the 0.7100 mark, commented FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the rebound in AUD could extend but a sustained rise above 0.7020 is unlikely’. We added, ‘the major resistance at 0.7050 is not expected to come into the picture’. Our view turned out to be correct as AUD rose to 0.7040 before closing at 0.7029 (+0.82%). While overbought, the advance in AUD could edge above 0.7055 first before easing off. The next resistance at 0.7105 is not expected to come under threat. On the downside, a breach of 0.6975 (minor support is at 0.7005) would indicate that risk for further AUD strength has dissipated.”

Next 1-3 weeks: “Yesterday (17 May, 0.6980), we highlighted that ‘the corrective rebound could extend to 0.7050’. Our view was not wrong as AUD subsequently rose to 0.7040. Upward momentum has improved further and the rebound in AUD could extend to 0.7105. The upside pressure is deemed intact as long as AUD does not move below 0.6950 (‘strong support’ level was at 0.6900 yesterday).”