Sharp increase in momentum is likely to lead to further declines in AUD, but 0.6620 is probably out of reach today. In the longer run, rejuvenated momentum suggests AUD weakness remains intact; the level to monitor is 0.6620, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

The level to monitor is 0.6620

24-HOUR VIEW: “Our view for AUD to trade in a 0.6685/0.6730 range was incorrect, as it plummeted to a low of 0.6652 in NY trading. The sharp increase in momentum is likely to lead to further declines, even though the major support at 0.6620 is probably out of reach today. To maintain the momentum, AUD must remain below 0.6685 with minor resistance at 0.6670.”

1-3 WEEKS VIEW: “Yesterday (21 October), when AUD was at 0.6715, we indicated that ‘Downward momentum is slowing rapidly, and a breach of 0.6740 (‘strong resistance’ level) would mean that the AUD weakness has stabilised.’ However, AUD did not breach the ‘strong resistance’ level. Instead, it dropped sharply to a low of 0.6652. The rejuvenated momentum suggests that the AUD weakness from early this month remains intact. The level to monitor is 0.6620, followed by a significant support level at 0.6585. On the upside, the ‘strong resistance’ level has moved lower to 0.6705 from 0.6740.”