AUD/USD faces some consolidation in the near term – UOB

AUD/USD is now seen trading within the 0.7170-0.7370 range in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “The sharp drop in AUD to 0.7245 yesterday came as a surprise (we were expecting AUD to consolidate). While the rapid decline appears to be overdone, there is scope for further AUD weakness. That said, a sustained decline below 0.7230 appears unlikely (next support is at 0.7170). Resistance is at 0.7300 but only a breach 0.7320 would indicate that the current downward pressure has eased.”

Next 1-3 weeks: “Yesterday (08 Mar, spot at 0.7330), we highlighted that “a breach of the ‘strong support’ at 0.7300 would suggest that 0.7440 could be a temporary top”. AUD subsequently dropped to 0.7245 and while we do not rule out a deeper pullback, at this stage, we view the current movement as part of a consolidation phase. In other words, we expect AUD to trade sideways for now, expected to be within a range of 0.7170/0.7370.”