AUD/USD could struggle to advance further – UOB

FX Strategists at UOB Group stay neutral on the pair although extra gains in the Aussie Dollar appear unlikely.

Key Quotes

24-hour view: “The sudden ‘burst’ higher in AUD that hit a high of 0.7440 was clearly not expected. Despite the pullback from the high, the underlying tone is still firm and a break 0.7440 would not be surprising. However, there is another strong resistance at 0.7465 and the odds for a clear break of this level are not high. On the downside, only a move back below 0.7385 would indicate a short-term top is in place (minor support is at 0.7405)”.

Next 1-3 weeks: “AUD staged a relatively strong recovery yesterday as it hit 0.7740, just one pip below the 3-week high of 0.7441. While the price action is clearly positive for AUD, those who are anticipating a higher AUD should not get too ‘excited’ as several strong resistance levels are stacked closely together above 0.7440, namely at 0.7465, 0.7485 and the critical level of 0.7500. While upward momentum has improved somewhat, AUD would likely struggle to break these strong resistance levels. Overall, we expect AUD to stay mildly supportive for now as long as it can hold above 0.7370 within the next few days”.