24-hour view: We indicated yesterday that “mild upward pressure could lead to AUD edging higher to 0.6705”. We added, “In view of the mild upward pressure, a sustained rise above this level is unlikely.” While AUD rose more than expected to 0.6721, it dropped quickly from the high. In early Asian trade, AUD continues to drop. The rapid increase in momentum suggests further AUD weakness even the major support at 0.6620 is likely out of reach today. Resistance is at 0.6695, followed by 0.6720. 

Next 1-3 weeks: Two days ago (26 Jun, spot at 0.6680), we highlighted that AUD could weaken further. However, we indicated that “the sharp decline from last Friday appears to be running ahead of itself and it might take a while before 0.6620 comes into view.” In early Asian trade, AUD fell sharply and downward momentum has increased. From here, if AUD breaks 0.6620, the focus will shift to 0.6590. On the upside, a breach of 0.6740 (‘strong resistance previously at 0.6755) indicates the current downward pressure has eased.