Australian Dollar: Firmer tone but capped at 0.7000 against US Dollar – UOB

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note AUD/USD closed firmly around 0.6981, with underlying momentum continuing to improve. For today, they expect the pair to edge higher but see resistance at 0.7000, with support at 0.6970 and 0.6960. On a 1–3 week view, they maintain a neutral stance, looking for a 0.6935–0.7020 trading band.

Neutral outlook with upside constrained

"24-HOUR VIEW: After AUD traded in a range as we expected last Thursday, we highlighted on Friday that “further range-trading appears likely, though the slightly firmer underlying tone suggests a higher range of 0.6945/0.6985.” AUD subsequently traded between 0.6958 and 0.6989, closing on a firm note at 0.6981 (+0.31%). The underlying momentum continues to firm, and we expect AUD to edge higher today. That said, any advance is unlikely to break above 0.7000. Support is at 0.6970, followed by 0.6960."

"1-3 WEEKS VIEW: We turned neutral on AUD last Wednesday (07 Oct, spot at 0.6980) and indicated that it “is likely to trade between 0.6935 and 0.7020.” There is no change in our view."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)