AUD/USD faces the likeliness of further decline, although there is a solid support around 0.7110, suggested FX Strategists at UOB Group.
24-hour view: “We highlighted last Friday that ‘the weakness in AUD has scope to extend to 0.7135 before stabilizing’. While our view was not wrong as AUD dropped to 0.7130, we did not anticipate the subsequent sharp bounce from the low. Downward pressure has eased and the current movement is viewed as part of consolidation and AUD is likely to trade between 0.7155 and 0.7210 for today.”
Next 1-3 weeks: “Last Friday, (07 Jan, spot at 0.7165) we highlighted that risk is tilted to the downside but any weakness is expected to encounter solid support at 0.7110. There is no change in our view for now but a break of 0.7235 (no change in ‘strong resistance’ level) would indicate that the downside risk has dissipated.”