AUD/USD: Most likely to trade in a range of 0.6490/0.6535 – UOB Group

Momentum indicators are still mostly flat; Australian Dollar (AUD) could continue to consolidate against US Dollar (USD), most likely in a range of 0.6490/0.6535. In the longer run, downward momentum has built further, but AUD may consolidate first before attempting to break below 0.6455, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Momentum indicators are still mostly flat

24-HOUR VIEW: "AUD dropped to a low of 0.6455 last Thursday and then rebounded. On Friday, we indicated that 'the rebound in oversold conditions indicates AUD is unlikely to weaken further.' We held the view that AUD 'is more likely to consolidate in a range of 0.6475/0.6535.' Our view of consolidation was not wrong, as AUD traded between 0.6487 and 0.6541. Momentum indicators are still mostly flat, and AUD could continue to consolidate today, most likely in a range of 0.6490 and 0.6535."

1-3 WEEKS VIEW: "We revised our AUD view to negative last Wednesday (16 Jul, spot at 0.6520), indicating that 'there has been a tentative buildup in momentum, and AUD is likely to edge lower to 0.6480.' After AUD dropped to a low of 0.6455, we highlighted the following last Friday (18 Jul, spot 0.6500): 'Downward momentum has built further, but given the oversold short-term conditions, AUD may consolidate for a couple of days. Overall, as long as 0.6560 (‘strong resistance’ level) is not breached, there is potential for AUD to break below 0.6455. Looking ahead, the next level to monitor below 0.6455 is 0.6420.' Our view remains unchanged."