The ongoing upside bias could motivate AUD/USD to strengthen to the 0.6950 region in the next few weeks, suggested UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: “We expected AUD to weaken last Friday but we were of the view that AUD ‘is unlikely to challenge to the support at 0.6700’. AUD subsequently dropped briefly to 0.6722 before surging sharply to high of 0.6886. AUD could advance further to 0.6920. In view of the overbought conditions, the next resistance at 0.6950 is unlikely to come under threat. Support is at 0.6850, followed by 0.6820.”

Next 1-3 weeks: “In our most recent narrative from last Thursday (05 Jan, spot at 0.6825), we highlighted that upward momentum has faded and we expected AUD to trade within a broad consolidation range of 0.6660/0.6860. We did not expect the strong surge on Friday as AUD soared to a high of 0.6886. Upward momentum has been rejuvenated and we expect AUD strength from here. In order to keep the momentum going, AUD must stay above 0.6775 within the next few days. Resistance is at 0.6950.”