In the opinion of UOB Group’s Economist Lee Sue Ann and Market Strategist Quek Ser Leang, AUD/USD risks further pullbacks in the short term.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the rebound amid oversold conditions suggest AUD is unlikely to weaken further’ and we expected AUD to consolidate within a range of 0.6710/0.6775. Our view for consolidation was not wrong even though AUD traded within a narrower range than expected (0.6704/0.6757). AUD could continue to consolidate, likely between 0.6695 and 0.6750.”

Next 1-3 weeks: “Our latest narrative was from two days ago (27 Feb, spot at 0.6735) where we highlighted that the outlook for AUD remains weak and the next levels to watch are at 0.6680 and 0.6630. Since then, AUD has not been able to make any headway to the downside. That said, we continue to hold the same view. Overall, only a breach of 0.6800 (‘strong resistance’ level previously at 0.6820) would indicate that the AUD weakness that started two weeks ago has ended.”