Australian Dollar: Looking for 0.7100 break against US Dollar – UOB
Quek Ser Leang at UOB notes AUD/USD fell more sharply than anticipated to 0.7109, leaving short-term conditions oversold and favouring consolidation between 0.7110 and 0.7155 intraday.
UOB analysts anticipate the Australian Dollar to approach a key 0.7100 threshold against the US Dollar. Currently trading at 0.7109, the AUD/USD pair appeared more strongly oversold than initially expected, favoring consolidation between 0.7110 and 0.7155 intraday. The bank maintains a bearish outlook for the next 1-3 weeks, stating that AUD needs to close below 0.7100 to dip to 0.7050, while a resistance level at 0.7175 caps upside potential.
Earlier, UOB had flagged a potential decline toward 0.7120. Despite the AUD failing to falter to 0.7140 by Friday, UOB has continued to predict a test of 0.7140, with a break below this level remaining a possibility, but only if the strong support at 0.7120 materializes. The AUD's recent drop to 0.7109 appears to be an overreaction, and further declines are unlikely.
In the short term, AUD is more inclined to consolidate within the identified range. Analysts also noted that US bond yields remain close to multi-year highs due to looming FOMC and BoJ meetings, bolstering the US Dollar and putting downward pressure on the AUD. Mixed Chinese economic data for August has not provided any relief for the Aussie.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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