Sharp bounce appears to be overdone, but there is a chance for the Australian Dollar (AUD) to test 0.6700 before a pause is likely. In the longer run, there has been a slight increase in upward momentum; AUD could rise gradually and test 0.6720, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

AUD can rise gradually and test 0.6720

24-HOUR VIEW: “AUD dropped sharply to 0.6513 two days ago, and then rebounded. Yesterday, when AUD was at 0.6570, we indicated that ‘The bounce from the low has resulted in a slowdown in momentum.’ We added, ‘instead of weakening further, AUD is likely to trade in a 0.6530/0.6610 range.’ AUD did not weaken further, but instead of trading in a range, it surged to a high of 0.6688, closing on a strong note at 0.6681, up by 1.69% for the day. The sharp bounce appears to be overdone, but there is a chance for AUD to test 0.6700 before a pause is likely. A sustained rise above 0.6700 is unlikely. On the downside, a breach of 0.6620 (minor support is at 0.6645) would mean that the current upward pressure has faded.”