AUD/USD: A TEST OF 0.6800 IS LIKELY ABOVE 0.6755 – UOB

Once 0.6755 is cleared, AUD/USD could head towards the 0.6800 region in the near term, suggest UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia.

Key Quotes

24-hour view: Last Friday, we expected AUD to rise further. However, we noted that “the chance of it breaking above 0.6755 today is not high”. Our view turned out to be correct as AUD rose to a high of 0.6751. Today, there is a chance for AUD to break 0.6755 but it is highly unlikely to have enough momentum to challenge the next resistance at 0.6800 (minor resistance is at 0.6780). Support is at 0.6720, followed by 0.6700.

Next 1-3 weeks: Last Thursday (08 Jun, spot at 0.6660), we highlighted that AUD could rise further but any advance is expected to encounter solid resistance at 0.6755. After AUD rose, we stated last Friday (09 Jun, spot at 0.6710) that “the chance of AUD breaking above 0.6755 has increased”. We continue to hold the same view. A break of 0.6755 will shift the focus to 0.6800. On the downside, a breach of 0.6670 (‘strong support’ level was at 0.6645 last Friday) would indicate that AUD is not advancing further.