There is still room for extra gains in AUD/USD, although a convincing break above 0.6975 appears unlikely, suggested FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “Yesterday, we expected AUD to ‘trade sideways within a range of 0.6850/0.6920’. However, after dipping to a low of 0.6860, AUD staged a sharp advance to 0.6940. Despite the rapid rise, upward momentum has not improved by much. That said, AUD could rise to 0.6950 first before a pullback is unlikely. The major resistance at 0.6975 is unlikely to come into the picture. Support is at 0.6905 followed by 0.6885.”

Next 1-3 weeks: “Our latest narrative was from Wednesday (20 Jul, spot at 0.6905) where the strong boost in momentum is likely to lead to further AUD strength to 0.6975. While AUD rose to a high of 0.6940 yesterday, upward momentum has not improved by much. However, as long as 0.6840 (‘strong support’ level was at 0.6820 yesterday) is not breached, AUD could still advance to 0.6975. At this stage, the chance for a sustained rise above this level is not high.”