In the opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, AUD/USD could now trade between 0.6850 and 0.7005.

Key Quotes

24-hour view: “We expected to ‘consolidate and trade between 0.6855 and 0.6920’ yesterday. AUD subsequently dipped to 0.6856, rebounded robustly to 0.6963 before easing off to end the day at 0.6929 (+0.73%). We still view the price actions as part of a consolidation even though the increase in volatility and firmed underlying tone suggests a wider and higher range of 0.6870/0.6970.”

Next 1-3 weeks: “Two days ago (22 Aug, spot at 0.6885), we indicated that there is scope for AUD to extend its decline but any further weakness is expected to encounter solid support at 0.6830. Yesterday, AUD dropped to 0.6856 before rebounding strongly to take out our ‘strong resistance’ level at 0.6960 (high of 0.6963). The breach of the ‘strong resistance’ level indicates that the weakness in AUD has stabilized. From here, AUD is likely to trade sideways between 0.6850 and 0.7005.”