The continuation of the upside bias could lift AUD/USD to the 0.7230 region in the next weeks, suggested FX Strategists at UOB Group Quek Ser Leang and Peter Chia.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the overbought advance in AUD could extend to 0.7215’. Our expectations did not materialize as AUD edged to a high of 0.7203, dropped briefly to 0.7150 before rebounding. While upward pressure has waned, there is scope for AUD to test 0.7215 first before a more sustained pullback is likely. Support is at 0.7170 followed by 0.7150.”

Next 1-3 weeks: “We have expected AUD to head higher since early last week. As AUD advanced, we highlighted yesterday (31 May, spot at 0.7195) that AUD could strengthen to 0.7230. While upward momentum is beginning to ease, we still see room for AUD to advance. That said, a sustained rise above 0.7230 is unlikely. On the downside, a break of 0.7125 (no change in ‘strong support’ level from yesterday) would indicate that the current upward pressure has dissipated.”