AUD/USD now looks to re-visit 0.7480 – UOB

AUD/USD remains firm and could now attempt a test of the 0.7480 level in the short-term horizon, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that AUD ‘could break 0.7390 but overbought conditions suggest it may not be able to maintain a foothold above this level’. Our view for a higher AUD was not wrong but it easily took out 0.7390 and rose to 0.7410 before settling on a firm note at 0.7403 (+0.47%). While still overbought, there is chance for the advance in AUD to rise towards the major resistance at 0.7430 first before a pullback can be expected. For today, a sustained rise above 0.7430 is unlikely. On the downside, a break of 0.7370 (minor support is at 0.7385) would indicate that the current AUD strength is ready to take a breather.”

Next 1-3 weeks: “After AUD rose strongly on Wednesday, we highlighted yesterday (02 Sep, spot at 0.7370) that ‘boost in momentum is likely to lead to further AUD strength even though at this stage, it is premature to expect an advance to the August’s high near 0.7430’. Our view was not wrong even though we did not quite expect AUD to extend its advance so quickly (overnight high of 0.7410). While shorter-term conditions are overbought, a break of 0.7430 would not be surprising and would shift the focus to 0.7480. All in, only a break of 0.7340 (‘strong support’ level was at 0.7300 yesterday) would indicate that the current AUD strength that started early last week (see annotations in the chart below) has run its course.”