Chance of the Australian Dollar (AUD) rebounding, but the 0.6580 level is expected to offer strong resistance. AUD weakness seems to be overextended, both time- and price-wise, but stabilisation is only upon a breach of 0.6615, UOB Group FX analysts Quek Ser Leang and Peter Chia note.

Bears strive to test 0.6615

24-HOUR VIEW: “After AUD fell sharply to 0.6511 last Thursday and then rebounded, we indicated on Friday that ‘there is room for AUD to rebound further.’ However, we pointed out that ‘any advance is expected to face strong resistance at 0.6580.’ AUD then rebounded less than expected, reaching a high of 0.6869 before easing to close at 0.6547 (+0.14%). The underlying tone still seems a tad firm, and we continue to see chance of AUD rebounding. However, the 0.6580 level is still expected to offer strong resistance. On the downside, support levels are at 0.6535 and 0.6520.”

1-3 WEEKS VIEW: “Our update from last Friday (26 Jul, spot at 0.6545) is still valid. As highlighted, the weakness in AUD that started more than a week ago seems to be overextended, both time- and price-wise. However, only a breach of 0.6615 will indicate that the weakness has stabilised. As long as the ‘strong resistance’ level at 0.6615 is not breached, there is still a chance, albeit a low one, for AUD to decline further to 0.6480.”