Australian Dollar: Momentum builds toward 0.7200 against US Dollar – UOB
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann highlight AUD/USD’s sharp rally to 0.7180 and close near 0.7170, noting the move looks stretched but still lacks signs of a pause.
UOB's analysts Quek Ser Leang and Lee Sue Ann report that the Australian Dollar (AUD) has experienced a significant rally, reaching 0.7180 and nearing 0.7170 against the US Dollar. While the rally appears to be stretched, there are no indications of a pause in the upward trend. Intraday, they anticipate AUD to surpass 0.7180, with a resistance level of 0.7200 in sight, and a 1-3 week outlook suggests the Australian Dollar's strength could continue towards this major hurdle as long as 0.7105 holds.
Initially, they expected AUD to trade sideways between 0.7105 and 0.7135, but the market's reaction has been far more robust, with AUD surging to 0.7180 and eventually settling at 0.7169, marking an impressive 0.78% increase. At this point, the significant resistance at 0.7200 is unlikely to be reached in the near term. The immediate support level is identified as 0.7150; a breach of this threshold would suggest that the current bullish momentum may wane.
Looking ahead over the next one to three weeks, the analysts highlight that AUD strength remains intact, with a keen eye on the 0.7200 level, considering it a critical resistance barrier. To maintain upward momentum, AUD must sustain its position above 0.7105, which was previously identified as a 'strong support' level last Friday.
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