AUD/USD could extend the upside momentum to the 0.7250 region in the next weeks, according to UOB Group’s FX Strategists.

Key Quotes

24-hour view: “Our expectations for AUD to ‘trade sideways’ were incorrect as it popped to 0.7228 before pulling back sharply (low has been 0.7165). Despite the sharp pullback, downward momentum has barely improved and AUD is unlikely to weaken much further. For today, AUD is more likely to consolidate and trade between 0.7155 and 0.7215.”

Next 1-3 weeks: “Last Thursday (17 Feb, spot at 0.7205), we highlighted that risk has shifted to the upside and AUD could strengthen to 0.7250. AUD subsequently rose to a high of 0.7228 before pulling back sharply. While upward momentum has waned somewhat, there is no change in our view for now. Only a break of 0.7140 (no change in ‘strong support’ level) would indicate that 0.7250 is out of reach this time round.”