Australian Dollar: Fresh downside momentum targets 0.7120 against US Dollar – UOB
United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann flag a sudden AUD/USD selloff to 0.7156, with intraday momentum pointing to further losses toward 0.7140, though 0.7120 is seen as strong support for now.
UOB strategists Quek Ser Leang and Lee Sue Ann have identified a recent decline in the Australian Dollar (AUD) against the US Dollar (USD) with momentum pointing to further losses. Currently, the AUD/USD pair is trading around 0.7156, with 0.7120 identified as a strong support level. The bank anticipates the pair could drop towards 0.7120 unless it rises above 0.7210.
Over the past 24 hours, the AUD traded between 0.7210 and 0.7238, closing unchanged at 0.7217 (+0.01%). Despite this, the market has witnessed a sudden and sharp selloff, reaching a low of 0.7156, which contradicts the expected range of 0.7200 to 0.7235. The rapid momentum increase suggests further downside toward 0.7140, as the AUD appears oversold.
For the momentum to continue, the AUD needs to remain below 0.7190, with minor resistance at 0.7175. Over the next one to three weeks, UOB expects the AUD/USD pair to decline towards 0.7120, but breaking above 0.7210 could indicate a continued range trade. The recent AUD decline coincided with the release of hawkish RBA expectations, which dampened the AUD's recovery prospects.
Meanwhile, USD/JPY remains under pressure near 154.00, with Japanese PPI data fueling expectations of a more hawkish Bank of Japan (BoJ) stance ahead of the US consumer inflation data release on Friday.
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