According to UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, AUD/USD is now seen navigating within the 0.6865-0.7055 range in the next weeks.

Key Quotes

24-hour view: “We noted yesterday that downward pressure has eased somewhat and that AUD is unlikely to weaken further.  We expected AUD to trade in a range between 0.6865 and 0.6930. While AUD did not weaken further, instead of trading in a range, it rebounded strongly to 0.6989 before ending the day on a strong note at 0.6960 (+1.12%). The sharp rise appears to be overdone but there is room for AUD to test 0.7000 before easing. The major resistance at 0.7055 is not expected to come under threat. Support is at 0.6925, followed by 0.6890.”

Next 1-3 weeks: “After AUD fell sharply, we indicated on Monday (06 Feb, spot at 0.6920) that while AUD could weaken further, the 0.6825 level is expected to offer solid support. However, AUD did not quite test 0.6825 (low of 0.6856 on Monday) and yesterday, it rebounded strongly to a high of 0.6989. The breach of our ‘strong resistance’ level at 0.6980 indicates that the downward pressure has eased. AUD appears to have moved into a consolidation phase and it is likely to trade between 0.6865 and 0.7055 for the time being.”