Australian Dollar: Short-term range but path still lower against US Dollar – UOB
United Overseas Bank’s (UOB) Quek Ser Leang notes that AUD/USD has rebounded after an oversold slide, with intraday price action now expected between 0.7095 and 0.7130.
UOB's Quek Ser Leang observes AUD/USD rebounding after an oversold slide, with price action expected to range between 0.7095 and 0.7130. Despite short-term consolidation, the outlook for the next 1-3 weeks suggests a move toward 0.7050, with 0.7140 acting as the upper limit. Looking longer-term, a potential retest of 0.7277 remains possible.
Within a 24-hour period, AUD experienced a sharp decline to a low of 0.7075 two days ago. When it reached 0.7090 earlier in the Asian session, the comment was made that the decline may have been overdone, but no stabilization had been observed yet. The downside risk remained, but today, AUD is likely to remain within the range of 0.7070 to 0.7115.
However, AUD rebounded strongly to 0.7128, closing 0.35% higher at 0.7112. The immediate downside pressure has eased, and today, AUD appears set to trade between 0.7095 and 0.7130.
On Tuesday, September 15th, the pair was noted to be at 0.7135, with a warning that further weakness was not ruled out. Short-term conditions were deemed oversold, and AUD closing below 0.7100 was expected to trigger a move to 0.7050. Following a fall to 0.7087, the outlook was maintained, provided AUD holds below the "strong resistance" level of 0.7140. Should the pair surpass 0.7140, it would indicate a stabilization of the recent decline.
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