Further strength in AUD/USD is ruled out on a break below the 0.6370 level, according to Markets Strategist Quek Ser Leang and Economist Lee Sue Ann at UOB Group.

Key Quotes

24-hour view: “Last Friday, we expected AUD to ‘range-trade between 0.6405 and 0.6505’. However, AUD dipped to a low of 0.6389. Downward momentum has improved a tad and AUD is likely to edge lower today but a clear break of 0.6370 is unlikely. Resistance is at 0.6430 but only a break of 0.6460 would indicate that the current mild downward pressure has subsided.”

Next 1-3 weeks: “We turned positive in AUD early last week. As AUD rose, in our latest narrative from last Thursday (27 Oct, spot at 0.6480), we indicated that overbought short-term conditions could lead to 1 to 2 days of consolidation first but AUD is likely to strengthen to 0.6555 later on. However, AUD has been edging lower the last couple of days and upward momentum is beginning to fade. From here, a break of 0.6370 (no change in ‘strong support’ level from last Friday) would indicate that AUD is unlikely to strengthen further to 0.6555.”