AUD could retest the 0.6175 level; the next support at 0.6150 is not expected to come under threat. In the longer run, AUD must break and remain below 0.6180 before further weakness can be expected, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Below 0.6180 further weakness can be expected

24-HOUR VIEW: “Two days ago, AUD fell to a low of 0.6188. Yesterday, when AUD was at 0.6210, we noted that ‘the increase in downward momentum is not enough to suggest a sustained decline.’ However, we indicated that ‘provided that AUD remains below 0.6245 (minor resistance is at 0.6225), it could test the major support at 0.6180 before another rebound is likely.’ AUD then dropped to 0.6173, rebounding to close at 0.6198 (-0.29%). Although there has been no further increase in downward momentum, AUD could retest the 0.6175 level. The next support at 0.6150 is not expected to come under threat. Resistance is at 0.6210; a breach of 0.6225 would mean that downward momentum has eased.”

1-3 WEEKS VIEW: “Yesterday (09 Jan, spot at 0.6210), we highlighted that although the recent price action ‘has resulted in an increase in momentum, AUD must break and remain below 0.6180 before further weakness can be expected.’ While AUD subsequently dropped to a low of 0.6173, it rebounded quickly to close at 0.6198. The likelihood of AUD breaking clearly below 0.6180 remains intact, provided that 0.6250 (‘strong resistance’ level was at 0.6265 yesterday) is not breached.”