In the opinion of Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group, a deeper pullback in AUD/USD seems to have lost some traction as of late.

Key Quotes

24-hour view: “AUD bungeed yesterday as it plunged to 0.6170 before snapping back up to close at 0.6298 (+0.32%). The large bounce has room to extend but in view of the overbought conditions, a sustained rise above 0.6350 is unlikely (next resistance is at 0.6380). Support is at 0.6260, followed by 0.6220.”

Next 1-3 weeks: “We highlighted yesterday (13 Oct, spot at 0.6290) that while the risk is still on the downside, AUD has to break below 0.6200 before further sustained weakness is likely. AUD subsequently plunged briefly to 0.6170 before rebounding to a high of 0.6316. The price actions have diminished the odds of further AUD weakness. However, only a break of 0.6380 (no change in ‘strong resistance’ level) would indicate that AUD is unlikely to weaken further.”