In the view of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, AUD/USD still faces downside risks in the near term.

Key Quotes

24-hour view: “We expected AUD to trade in a range between 0.6630 and 0.6675 yesterday. We did anticipate the sharp decline as AUD fell to a low of 0.6608. Further decline appears likely even though the major support at 0.6575 could be out of reach today. Resistance is at 0.6635; a break of 0.6655 would indicate that AUD is not weakening further.”

Next 1-3 weeks: “On Monday (22 May, spot at 0.6655), we indicated that AUD has to break and stay below 0.6630 in the next 1-2 days or the chance of it declining further to 0.6575 will fizzle out. Yesterday (23 May), AUD broke below 0.6630 and fell to a low of 0.6608. While the risk for AUD is still on the downside, it is worth noting that the levels between 0.6565 and 0.6575 are very strong support. On the upside, a breach of 0.6670 (‘strong resistance’ level previously at 0.6685) would indicate that the downward pressure in AUD that started more than a week ago has faded.”