In the opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, further losses in AUD/USD need to break below the 0.6360 level.

Key Quotes

24-hour view: “The sharp drop in AUD to a low of 0.6390 came as a surprise (we were expecting range-trading). The decline appears to be overdone and AUD is unlikely to weaken further. For today, AUD is more likely to trade between 0.6380 and 0.6480.”

Next 1-3 weeks: “After AUD rebounded strongly from 0.6364, we highlighted last Thursday (29 Sep, spot at 0.6490) that downward momentum is beginning to wane and this coupled with the strong bounce suggests the weakness in AUD could stabilize soon. We added, ‘only a break of 0.6555 would indicate AUD is unlikely to weaken further’. While AUD subsequently dropped to 0.6390 on Friday, downward momentum has not improved much. However, the risk for AUD is still on the downside but it has to break below 0.6360 first before further sustained decline is likely. Resistance wise, a breach of 0.6510 (‘strong resistance’ level previously at 0.6555) would indicate that the weakness in AUD that started more than 2 weeks ago has stabilized. Looking ahead, the next support below 0.6360 is at 0.6330.”