In the opinion of Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia, a potential drop to the 0.6500 region in AUD/USD seems to be losing traction in the short term.

Key Quotes

24-hour view: “Last Friday, we held the view that AUD ‘is likely to trade with a downward bias but 0.6560 is expected to offer strong support’. AUD subsequently dropped to 0.6565 before rebounding to a high of 0.6641. While there is no significant improvement in upward momentum, AUD could advance further to 0.6660. The strong resistance at 0.6700 is unlikely to come under threat. On the downside, a breach of 0.6580 (minor support is at 0.6600) would indicate that AUD is unlikely to advance further.”

Next 1-3 weeks: “In our most recent narrative from last Wednesday (08 Mar, spot at 0.6585), we highlighted that AUD ‘is likely to weaken further but any weakness is likely to be at a slower pace’. We added, ‘The major support at 0.6500 may not come into view so soon’. Last Friday, AUD dipped to 0.6565 before rebounding sharply. Downward pressure is beginning to ease and the odds of AUD dropping to 0.6500 have diminished. However, only a break of 0.6700 (no change in ‘strong resistance’ level) would indicate that AUD has moved into a consolidation phase.”