In the view of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, AUD/USD is now likely to trade between 0.6365 and 0.6500 in the next few weeks.

Key Quotes

24-hour view: After AUD dropped sharply to a low of 0.6413 last Thursday, we highlighted on Friday that “the sharp drop has room to extend, but it is unlikely to challenge the major support at 0.6365.” We indicated that “there is another support at 0.6390.” While our view was not wrong as AUD dropped to a low of 0.6380, the decline was brief as it rebounded quickly from the low. Downward momentum has waned somewhat, and the outlook for AUD today appears to be neutral. In other words, it is likely to trade sideways, probably between 0.6385 and 0.6445. 

Next 1-3 weeks: Last Friday (25 Aug, spot at 0.6420), we highlighted that “instead of rebounding further, AUD is more likely to trade in a range of 0.6365/0.6500 for the time being.” We continue to hold the same view. Looking ahead, if AUD breaks clearly below 0.6365, it could trigger a decline to 0.6300