Further sideways trading appears likely, probably in a 0.6240/0.6295 range. In the longer run, current price action is likely the early stages of a recovery phase that could potentially reach 0.6350, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Price action is the early stages of a recovery phase

24-HOUR VIEW: “Yesterday, we expected AUD to ‘trade sideways between 0.6220 and 0.6290.’ AUD subsequently traded in a narrower range of 0.6253/0.6293. AUD closed largely unchanged at 0.6274 (+0.02%). Further sideways trading appears likely today, probably in a 0.6240/0.6295 range.”

1-3 WEEKS VIEW: “We revised our AUD view to positive on Monday (21 Jan, spot at 0.6275), indicating that ‘the current price action is likely the early stages of a recovery phase that could potentially reach 0.6350.’ Since then, AUD has not been able to make much headway on the upside. However, we will maintain our view as long as 0.6220 (‘strong support’ level previously at 0.6190) is not breached.”