The upside momentum could lift AUD/USD to the 0.7390 level in the next weeks, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “While we expected AUD to strengthen yesterday, we were of the view that ‘a sustained rise above 0.7315’ is unlikely. The subsequent advance exceeded our expectations by a wide margin as AUD soared to 0.7349. Deeply overbought conditions coupled with the rapid pullback from the high suggests that AUD is unlikely to strengthen much further. For today, AUD is more likely to trade sideways between 0.7280 and 0.7350.”
Next 1-3 weeks: “We have expected AUD to strengthen towards 0.7315 since Tuesday (01 Mar, spot at 0.7260). As AUD moved higher, we highlighted yesterday (03 Mar, spot at 0.7290) that a break of 0.7315 would not be surprising but the chance for the advance to extend to 0.7340 is not high. However, AUD popped to a high of 0.7348 during NY hours. The price actions suggest AUD could continue to advance. The next resistance level above 0.7350 is at 0.7390. The upside risk is intact as long as AUD does not move below the ‘strong support’ at 0.7255 (level was at 0.7225 yesterday).”