AUD/USD risks further losses near term – UOB

AUD/USD faces the next support levels at 0.7400 and 0.7365 in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected AUD to weaken yesterday but we were of the view that it ‘is unlikely to break the major support at 0.7445’. The ease by which AUD cracked 0.7445 and plummeted to 0.7417 came as a surprise. While clearly oversold, the sharp drop has scope to extend but a sustained decline below 0.7400 is unlikely. The next support at 0.7365 is not expected to come under challenge for now. Resistance is at 0.7455 but only a breach of 0.7470 would indicate that the current weakness has stabilized.”

Next 1-3 weeks: “On Wednesday (07 Jul, spot at 0.7490), we noted that risk for AUD is shifting to the downside but AUD has to break the major support at 0.7445 before a sustained decline can be expected. We added, ‘the prospect for AUD to break 0.7445 appears to be quite high’. AUD easily cracked 0.7445 yesterday (08 Jul) and plummeted to 0.7417. The price actions suggest that the risk for AUD is clearly on the downside. The support levels to watch out for are at 0.7400 and 0.7365. The downside risk is deemed intact as long as AUD does not move above 0.7500 (‘strong resistance’ level was at 0.7555 yesterday).”

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