Further upside could push AUD/USD to the 0.7340 region in the next weeks, suggested FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We expected AUD to ‘consolidate and trade between 0.7150 and 0.7210’ yesterday. We did not expect the burst in volatility as AUD dropped to 0.7141 before lifting off and surged to a high of 0.7270. In view of the solid upward momentum, further AUD strength would not be surprising. That said, a sustained rise above 0.7300 is unlikely (next resistance is at 0.7340). Support is at 0.7245 followed by 0.7225.”

Next 1-3 weeks: “We have expected AUD to head higher since early last week. In our latest narrative from Wednesday (01 Jun, spot at 0.7190), we highlighted that while upward momentum is beginning to ease, we still see room for AUD to advance. However, we were of the view that a sustained rise above 0.7230 is unlikely. We did not expect the sudden surge yesterday as AUD rocketed to 0.7270. The clear break of 0.7230 coupled with the burst in momentum suggests that the current AUD strength could extend further. The next resistance is at 0.7340. The upside risk is intact as long as AUD does not move below 0.7195 (‘strong support’ level was at 0.7125 yesterday).”