AUD/USD: Likely to trade in a sideways range of 0.6400/0.6450 – UOB Group

Australian Dollar (AUD) is likely to trade in a sideways range of 0.6400/0.6450 vs US Dollar (USD). In the longer run, outlook is mixed; AUD is likely to trade in a range between 0.6370 and 0.6480, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Outlook for AUD is mixed

24-HOUR VIEW: "Our view for AUD to 'continue to rise' yesterday was incorrect. Instead of rising, AUD plummeted to 0.6392, rebounding to close lower by 0.53% at 0.6424. Despite the drop, there has been no significant increase in downward momentum. Instead of declining further, AUD is more likely to trade in a sideways range of 0.6400/0.6450 today."

1-3 WEEKS VIEW: "Last Wednesday (14 May), when AUD was at 0.6470, we indicated that 'To continue to rise, AUD must break and hold above 0.6515.' Following the advance in AUD on Monday, we highlighted yesterday, Tuesday (20 May, spot at 0.6450), that 'The renewed upward momentum has increased the odds of AUD breaking above 0.6515.' However, AUD subsequently fell below our ‘strong support’ level of 0.6400 (low of 0.6392), indicating that the chance of an advance has dissipated. The recent choppy price action has resulted in a mixed outlook. For the time being, we expect AUD to trade in a range between 0.6370 and 0.6480."