The Australian Dollar (AUD) is expected to trade in a sideways range of 0.6530/0.6575. AUD weakness seems to be overextended, both time- and price-wise, but stabilisation is only upon a breach of 0.6615, UOB Group FX strategists Quek Ser Leang and Peter Chia note.

AUD is set to drift towards 0.6615

24-HOUR VIEW: “We indicated yesterday that ‘there is a chance of AUD rebounding, but the 0.6580 level is expected to offer strong resistance.’ We pointed out that ‘support levels are at 0.6535 and 0.6520.’ Our view did not materialise as AUD traded between 0.6524 and 0.6568, closing largely unchanged at 0.6549 (+0.03%). There has been no increase in either downward or upward momentum. Today, we expect AUD to trade in a sideways range of 0.6530/0.6575.”

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 about two weeks 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.”