24-hour view: We expected AUD to trade in a range of 0.6300/0.6360 yesterday. However, AUD traded between 0.6324 and 0.6378. Upward momentum has improved slightly. Today, there is scope for AUD to test 0.6400. A clear break above this level is unlikely. On the downside, a breach of 0.6330 (minor support is at 0.6350) would mean that the current mild upward pressure has eased. 

Next 1-3 weeks: On Tuesday (03 Oct, spot at 0.6365), we held the view that AUD “is likely to weaken to 0.6330, possibly 0.6280.” After AUD plunged to a low of 0.6283, we highlighted on Wednesday (04 Oct, spot at 0.6310) that “the swift decline in AUD appears to be overstretched, but it has not stabilised.” We added, “AUD must break and stay below 0.6280 before further decline is likely.” We continue to hold the same view. Overall, only a breach of 0.6400 (no change in ‘strong resistance’ level from yesterday) would indicate that the weakness in AUD has stabilised.