According to FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, AUD/USD risks a deeper drop once 0.6815 is cleared.

Key Quotes

24-hour view: “We expected AUD to ‘trade between 0.6875 and 0.6935’ yesterday. We did not expect the increase in volatility as AUD rose to 0.6956 before plunging to 0.6846 (closed at 0.6854, -0.70%). The rapid drop from the high has room to extend but for today, any weakness is unlikely to break 0.6815 (there is another support at 0.6840). Resistance is at 0.6880 followed by 0.6900.”

Next 1-3 weeks: “On Monday (29 Aug, spot at 0.6870), we held the view that the risk is for AUD to weaken to 0.6815. Yesterday (30 Aug), AUD rose and cracked our ‘strong resistance’ level at 0.6945 (high of 0.6956) before dropping back down quickly. While the breach of the ‘strong resistance’ level has invalidated our view, the shorter-term bias still appears to be tilted to the downside. That said, AUD has to break the major support at 0.6815 before a sustained decline is likely.”