Australian Dollar: Downside limited against US Dollar – UOB

United Overseas Bank (UOB) strategist Quek Ser Leang reports AUD/USD closed at 0.6951 after a brief spike to 0.6976, with intraday price action expected to stay between 0.6930 and 0.6975. He judges the recent weakness from mid-September remains intact but, given oversold conditions, further declines may struggle to reach 0.6866. On a 1–3 month horizon, he flags a bearish EMA crossover with the July low at 0.6923 in focus.

Aussie-Dollar weakness seen constrained near supports

"24-HOUR VIEW: Last Thursday, AUD fell to a low of 0.6904 and rebounded. When it was at 0.6930 in the early Asian session yesterday, we indicated that “downward momentum has slowed somewhat with the rebound, and AUD is unlikely to weaken much further.” We added that AUD “is more likely to consolidate between 0.6900 and 0.6950.” AUD subsequently dipped to 0.6914, but during the NY session, it briefly popped to a high of 0.6976. AUD closed 0.29% higher at 0.6951. The brief rise did not result in any increase in upward momentum. Today, we expect AUD to trade sideways between 0.6930 and 0.6975."

"1-3 WEEKS VIEW: We highlighted the following last Friday (02 Oct, spot at 0.6930): “While the weakness that started in the middle of last month remains intact, given the deeply oversold conditions, any further decline may fall short of the next major support at 0.6866. Overall, only a breach of 0.6985 (‘strong resistance’ level) would indicate that the weakness in AUD is stabilising.” 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.)