AUD/USD: Unlikely to reach 0.6540 – UOB Group

There is a chance for Australian Dollar (AUD) to rise, but based on the current momentum, it might not be able to reach 0.6540. In the longer run, slight increase in upward momentum is likely to lead to a higher range of 0.6440/0.6540 rather than a sustained advance, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Slight increase in upward momentum

24-HOUR VIEW: "Yesterday, we expected AUD to 'trade in a range of 0.6480/0.6510.' AUD subsequently traded in a wider range than expected, dropping to a low of 0.6463 before staging a sharp rebound to 0.6513. There has been a tentative buildup in upward momentum. Today, there is a chance for AUD to rise, but based on the current momentum, it might not be able to reach the major resistance at 0.6540. Note that there is another resistance level at 0.6525. To keep the momentum going, AUD must hold above 0.6475, with minor support at 0.6495."

1-3 WEEKS VIEW: "After AUD rose sharply last Friday, we highlighted on Monday (25 Aug, spot at 0.6485) that 'there has been an increase in upward momentum, but not significantly, and this is likely to lead to a higher range of 0.6440/0.6540 rather than a sustained advance.' Although upward momentum has increased further, it is not sufficient to suggest that AUD is ready to break above 0.6540 just yet. In other words, we continue to hold the same view."