In the opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, AUD/USD risks a drop to 0.6730 in the near term.

Key Quotes

24-hour view: “We highlighted yesterday that AUD ‘could advance but is unlikely to challenge the strong resistance at 0.6920’. However, AUD plummeted to 0.6762 before rebounding. The rapid decline appears to be running ahead of itself and AUD is unlikely to weaken much further. For today, AUD is more likely to trade between 0.6760 and 0.6850.”

Next 1-3 weeks: “We turned negative AUD last Thursday (30 Jun, spot at 0.6880). After AUD dropped to 0.6764 and rebounded strongly, we highlighted yesterday (05 Jul, spot at 0.6875) that there is room for further AUD weakness but the probability for AUD to move below 0.6764 is not high. AUD subsequently dropped to a low of 0.6762 during NY session before rebounding. Despite the decline, downward momentum has not improved by much. That said, the risk is still on the downside as long as 0.6890 (‘strong resistance’ level was at 0.6920 yesterday) is not breached. Looking ahead, a clear break of 0.6760 would shift the focus to 0.6730.”