According to FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, AUD/USD could extend the upside to the 0.7170 region near term.

Key Quotes

24-hour view: “Yesterday, we held the view that ‘the overbought advance in AUD could test 0.7120 first before a more sustained pullback is likely’. The anticipated advance exceeded our expectations as AUD rose to 0.7136 before pulling back. The pullback amidst overbought conditions suggests AUD is unlikely to advance further. For today, AUD is more likely to trade sideways, expected to be within a range of 0.7060/0.7130.”

Next 1-3 weeks: “Our update from yesterday (11 Aug, spot at 0.7080) still stands. As highlighted, AUD is likely to strengthen further and the level to monitor is at 0.7170. Overall, the current AUD strength is intact as long as it does not move below 0.7015 (strong support’ level was at 0.6990 yesterday).”