AUD/USD neutral, likely between 0.7530/0.7630 – UOB

FX Strategists at UOB Group have now shifted their view to neutral from bullish in the near term on the Aussie Dollar.

Key Quotes

“AUD traded in a range of 0.7571/0.7625 yesterday, reasonably close to our expected 0.7570/0.7620 consolidation range. However, the daily closing is on the weak side and the downward pressure is increasing quickly. That said, 0.7565 is expected to offer solid support but a break of this level could lead to a rapid drop to the next support at 0.7535. Resistance is at 0.7600 and the 0.7625 high seen yesterday is expected to be strong enough to cap any intraday rebound”.

“The call to exit half of long position yesterday was timely as AUD failed to move above the major 0.7635 resistance once again (high of 0.7625). The subsequent weak closing in NY is enough to indicate that the bullish phase that started 2 weeks ago has ended. Those with remaining long should exit their position at current level of 0.7580 (for an average exit rate of 0.7590). From here, the outlook has shifted to neutral and AUD is expected to trade sideways, likely within a 0.7525/0.7630 range. That said, the immediate bias is on the downside and the odds for a move to 0.7525 first is markedly higher than for a move to 0.7630”.