FX Strategists at UOB Group noted that a drop below 0.7440 would indicate that the positive phase in AUD/USD has finished.

Key Quotes

24-hour view: “We highlighted yesterday that ‘while the advance in AUD is deeply overbought, robust upward momentum could carry AUD higher to 0.7550’. We added, ‘a sustained rise above 0.7550 is unlikely’. AUD subsequently rose to 0.7547 before staging a sharp sell-off that sent it plummeting to 0.7459 during NY session. The rapid drop from the high appears to be overdone and AUD is unlikely to weaken much further. For today, AUD is more likely to between 0.7440 and 0.7510.”

Next 1-3 weeks: “We have held a positive view in AUD for about 2 weeks now. In our latest narrative from yesterday (21 Oct, spot at 0.7520), we indicated that AUD ‘could strengthen further to 0.7550, even as high as 0.7580’. AUD subsequently rose to within a few pips of 0.7550 (high of 0.7547) before dropping sharply. The rapid drop from the high has resulted in a quick loss in momentum and a break of our ‘strong support’ at 0.7440 would indicate that the positive phase has come to an end. Unless AUD moves and stays above 0.7490 within these 1 to 2 days, a break of 0.7440 would not be surprising.”