As long as AUD/USD trades above the 0.6700 level, another surpass of the 0.6800 barrier should remain on the cards, suggest Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘upward momentum has waned and this combined with the still overbought conditions suggests AUD is unlikely to advance much further’ and we expected AUD to ‘trade sideways between 0.6755 and 0.6805’. Our view of sideways trading was not wrong even though AUD traded in a lower range than expected (0.6747/0.6787). The price actions offer no fresh clues and AUD could continue to trade sideways, likely between 0.6745 and 0.6790.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (09 May, spot at 0.6780). As highlighted, overbought short-term conditions could lead to a couple of days of consolidation first. As long as 0.6700 (no change in ‘strong support’ level from yesterday) is not breached, there is still chance for the AUD strength that started in the middle of last week to extend to 0.6810.”