Further upside could lift AUD/USD to the 0.7170 zone in the short-term horizon, according to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘further AUD strength appears likely even though the major resistance at 0.7170 is unlikely to come under threat today’. Our view was not wrong as AUD rose to 0.7143 before retreating. Upward pressure has eased and AUD is unlikely to advance much further. Today, the AUD is expected to trade in a range between 0.7085 and 0.7145.”

Next 1-3 weeks: “Our view from yesterday (26 Jan, spot at 0.7100) that ‘the improved upward momentum suggests AUD is likely to advance further’ is still valid. As highlighted, the level to watch is 0.7170. On the downside, a breach of the ‘strong support’ at 0.7040 (level was at 0.7025 yesterday) would indicate that AUD is not advancing further.”