AUD/USD shifted its focus to 0.6690 – UOB

FX Strategists at UOB Group noted that a close below 0.6690 could open the door for extra weakness in AUD/USD to the 0.6640 region.

Key Quotes

24-hour view: “While AUD traded sideways between 0.6710 and 0.6735, the range was narrower than our expected 0.6710/0.6750. The underlying tone has softened somewhat and this could lead to a probe of the 0.6690 support. However, lackluster momentum suggests a sustained decline below this level is unlikely (this support is followed closely by the year-to-date low at 0.6678). Resistance is at 0.6735 followed by 0.6750”.

Next 1-3 weeks: “AUD traded in a narrow 25 pips range yesterday before ending the day on a soft note at 0.6717 (-0.29%). For now, we continue to hold the same view from last Tuesday (27 Aug, spot at 0.6775) wherein AUD is “trading in a consolidation phase”, expected to be within a 0.6690/0.6780 range. That said, the weakened underlying tone has resulted in an increase in downside risk but only a NY closing below 0.6690 would suggest AUD is ready to move to 0.6640. For now, the prospect for such a scenario is not that high but it would increase quickly unless AUD can move above 0.6780 within these few days”.