Australian Dollar: Losing momentum near recent highs against US Dollar – UOB

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann observe that AUD/USD has stalled after testing 0.7040, with intraday momentum indicators turning flat and suggesting consolidation between 0.7005 and 0.7035. On a 1–3 week basis, prior upside bias is fading as the pair struggles to clear 0.7040, and a break below 0.6995 would negate prospects for a move toward 0.7070. Longer-term EMAs still point to downside risks toward 0.6923.

Consolidation as upside momentum slows

"24-HOUR VIEW: AUD rose to a high of 0.7039 last Friday. When it was at 0.7030 yesterday, we indicated that “the slight increase in upward momentum suggests that the bias for AUD is tilted to the upside.” However, we were of the view that “any advance is likely to stay within a 0.7010/0.7045 range.” AUD then traded between 0.7013 and 0.7040 before settling at 0.7017. Momentum indicators are turning flat, and today, we expect AUD to range-trade, most likely between 0.7005 and 0.7035."

"1-3 WEEKS VIEW: We turned positive on AUD last Wednesday (21 Oct, spot at 0.7005), indicating that AUD “could rise toward 0.7035.” After AUD tested 0.7035, we highlighted on Thursday (22 Oct, spot at 0.7025) that AUD “could advance further, though the next technical target at 0.7070 may not come into view so soon.” Since then, AUD has struggled to move clearly above 0.7040, and upward momentum is starting to slow. From here, a break below 0.6995 (‘strong support’ level previously at 0.6985) would indicate that 0.7070 is not coming into view."

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