Further downside carries the potential to force AUD/USD to breach the 0.6700 level in the near term, according to FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We expected AUD to weaken yesterday but we noted, ‘in view of the oversold conditions, AUD may not be able to maintain a foothold below 0.6700’. However, AUD did not break 0.6700 as it rebounded from a low of 0.6712. Downward momentum has waned and this coupled with still oversold conditions suggests that AUD is likely to trade sideways for today, expected to be within a range of 0.6725/0.6790.”

Next 1-3 weeks: “Our view from yesterday (12 Jul, spot at 0.6740) still stands. As highlighted, AUD could drop below 0.6700. At this stage, the chance for a break of the next support at 0.6650 is not high. All in, AUD is expected to trade under pressure unless it can move above the ‘strong resistance’ level at 0.6835 (no change in ‘strong resistance’ level from yesterday).”