24-hour view: While we expected AUD to weaken yesterday, we held the view that it “is unlikely to break clearly below 0.6620”. However, in NY trade, AUD plunged to a low of 0.6599. The rapid decline appears to be overdone, but there is room for AUD to test the major support at 0.6595 before a more sustained rebound is likely. A sustained drop below 0.6595 is unlikely. Resistance is at 0.6655, followed by 0.6680. 

Next 1-3 weeks: Our latest narrative was from two days ago (05 Jul, spot at 0.6695) wherein we held view that AUD is likely to trade in a range of 0.6620/0.6770 for the time being. Yesterday (06 Jul), AUD broke below 0.6620 and fell to a low of 0.6599. Downward momentum appears to be building, albeit tentatively. From here, AUD must break and stay below 0.6595 before a sustained decline is likely. The chance for AUD to break clearly below 0.6595 is not high but it will remain in place as long as AUD stays below 0.6705 in the next few days. Looking ahead, the next support below 0.6595 is at 0.6520.