There is still scope for AUD/USD to drop to the mid-0.6400s in the next few weeks, comment UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: “Last Friday, we held the view that AUD ‘could weaken further but severely oversold conditions suggest it is unlikely to threaten 0.6450 today’. We stated, ‘Resistance is at 0.6525, followed by 0.6545’. Our view for GBP to weaken did not quite materialize as it eked out a fresh low of 0.6490 and then rebounded to 0.6544 before closing at 0.6518 (+0.18%). AUD appears to have moved into a consolidation phase and is likely to trade between 0.6500 and 0.6550 today.”

Next 1-3 weeks: “There is not much to add to our update from last Friday (26 May, spot at 0.6505). As highlighted, the weakness in AUD that started two weeks ago has yet to stabilize. In other words, AUD could weaken further to 0.6450. On the upside, a breach of 0.6590 (no change in ‘strong resistance’ level from last Friday) would suggest the weakness in AUD has stabilized.”