There is scope for the Australian Dollar (AUD) to drop below 0.6660; it is too early to determine if 0.6640 is within reach, UOB Group FX strategists Quek Ser Leang and Peter Chia note.

Is set to test 0.6640

24-HOUR VIEW: “We indicated last Friday that AUD could dip below 0.6680. We also indicated that ‘the next support at 0.6640 is highly unlikely to come into view.’ However, AUD dipped less than expected, only reaching a low of 0.6681. AUD rebounded upon opening today. The rebound in oversold conditions and slowing momentum suggest it is unlikely to weaken further. Today, AUD is more likely to trade sideways between 0.6685 and 0.6725.”

1-3 WEEKS VIEW: “Our update from last Friday (19 Jul, spot at 0.6700) still stands. As highlighted, while there is scope for AUD to drop below 0.6660, it is too early to determine if there is enough momentum for it to reach 0.6640. On the upside, a breach of 0.6755 (no change in ‘strong resistance’ level) would indicate that AUD is not declining further.”