AUD/USD: Major support at 0.6505 is not expected to come under threat – UOB Group

There is scope for Australian Dollar (AUD) to test 0.6530; the major support at 0.6505 is not expected to come under threat. In the longer run, AUD is likely to trade in a range between 0.6505 and 0.6610, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

AUD is likely to trade between 0.6505 and 0.6610

24-HOUR VIEW: "AUD rose to a high of 0.6616 two days ago and then fell sharply. Yesterday, when AUD was at 0.6580, we indicated that 'upward momentum has eased with the decline'. We added, 'the current price movements are likely part of a range-trading phase between 0.6550 and 0.6605'. Our view was incorrect. AUD rose to 0.6598 and then dropped to a low of 0.6533. Despite the decline, there is no significant increase in downward momentum. However, there is scope for AUD to test 0.6530 before a recovery can be expected. We do not expect the major support at 0.6505 to come under threat. Resistance is at 0.6575, followed by 0.6595."

1-3 WEEKS VIEW: "Two days ago (29 Oct, spot at 0.6595), we highlighted that 'the price action continues to suggest AUD strength, and the next level to watch is 0.6630'. We added, 'we will maintain our view as long as 0.6535 (‘strong support’ level) is not breached'. Yesterday, AUD fell and broke below 0.6535. The breach of our ‘strong support’ indicates that upward momentum has faded. From here, we expect AUD to trade in a range, most likely between 0.6505 and 0.6610."