In opinion of FX Strategists at UOB Group, AUD/USD could still head lower and retest 0.7130 in the next weeks.

Key Quotes

24-hour view: “After AUD dropped sharply on Friday, we highlighted yesterday that ‘the rapid decline appears to be overdone and AUD is unlikely to weaken much further’. We added, ‘AUD could dip 0.7170 before the risk of a rebound would increase’. AUD subsequently dipped to 0.7165, rebounded to 0.7228 before easing off to close at 0.7198 (+0.16%). The price action is viewed as part of a consolidation and AUD is likely to trade sideways between 0.7165 and 0.725 for today.”

Next 1-3 weeks: “Our update from yesterday (15 Mar, spot at 0.7205) still stands. As highlighted, downward momentum has improved and the risk has shifted to the downside. However, the rapid decline from late last week appears to be running ahead of itself and further strong decline is unlikely. From here, AUD is likely to edge lower to 0.7130. On the upside, a breach of 0.7285 (‘strong resistance’ level was at 0.7305 yesterday) would indicate that the downside risk has dissipated.”