Further selling pressure could drag AUD/USD to 0.6750 region ahead of 0.6705 in the short-term horizon, comment FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “Yesterday, we highlighted that ‘downward momentum is building quickly’ and we held the view ‘the risk for AUD is on the downside towards 0.6785’. Our view turned out to be correct even though the weakness in AUD exceeded our expectations (AUD dropped to a low of 0.6771). The downside risk remains intact but in view of the oversold conditions, the major support at 0.6750 could be out of reach for now. Resistance is at 0.6825 followed by 0.6845.”

Next 1-3 weeks: “Yesterday (01 Sep, spot at 0.6835), we held the view that AUD is likely to weaken to 0.6785, as low as 0.6750. AUD subsequently dropped to 0.6771. We continue to expect AUD to weaken and a break of 0.6750 would shift the focus to 0.6705. The downside risk is intact as long as AUD does not move above 0.6870 (‘strong resistance’ level was at 0.6910 yesterday).”