AUD/USD: Likely to trade in a range between 0.6635 and 0.6685 – UOB Group

Outlook is mixed; Australian Dollar (AUD) could trade in a range between 0.6635 and 0.6685. In the longer run, advance in AUD from early last week has come to an end; AUD is likely to consolidate in a range of 0.6600/0.6710, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Advance in AUD from early last week has come to an end

24-HOUR VIEW: "Yesterday, when AUD was at 0.6685, we highlighted that 'although upward momentum has not increased significantly, there is a chance for AUD to edge above 0.6700.' However, we were of the view that 'a sustained rise above this level appears unlikely.' We pointed out that 'support levels are at 0.6675 and 0.6660.' The subsequent price movements did not quite turn out as expected, as AUD rose to 0.6707 and then dropped sharply to a low of 0.6641. The volatile price movements have resulted in a mixed outlook. Today, AUD could trade in a range, likely between 0.6635 and 0.6685."

1-3 WEEKS VIEW: "We turned positive on AUD early last week. Tracking the subsequent price movements, we indicated yesterday (17 Sep, spot at 0.6685) that 'there is a chance for AUD to break above 0.6700.' However, we pointed out that “it is too early to determine whether AUD has sufficient momentum to reach 0.6735.” AUD then broke above 0.6700, reaching a high of 0.6707 before dropping quickly to a low of 0.6641. Although our ‘strong support’ level at 0.6640 has not been clearly breached yet, upward momentum has largely faded. In other words, the advance from early last week has come to an end. From here, we are revising our view to neutral, and we expect AUD to consolidate in a range of 0.6600/0.6710."