Slight increase in downward momentum is likely to result in a lower trading range of 0.6215/0.6265. In the longer run, for the time being, AUD is expected to trade between 0.6180 and 0.6310, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

AUD is likely to trade in a range for the time being

24-HOUR VIEW: “After the choppy trading in AUD on Monday, we indicated yesterday (when AUD was trading at 0.6240) that ‘the sharp but brief swings have resulted in a mixed outlook.’ We held the view that AUD ‘could trade sideways, probably between 0.6210 and 0.6280.’ AUD then traded in a 0.6228/0.6288 range, closing lower by 0.25% at 0.6231. Although the price action has led to a slight increase in downward momentum, this is likely to result in a lower trading range of 0.6215/0.6265 instead of a sustained decline.”

1-3 WEEKS VIEW: “We pointed out yesterday (07 Jan, spot at 0.6240) that AUD ‘may have found an interim bottom at 0.6179 last week.’ However, we noted that ‘as there has been no significant increase in upward momentum, AUD is likely to trade in a range for the time being, expected to be between 0.6180 and 0.6310.’ There is no change in our view.”