AUD/USD: Weakness seen meeting support around 0.7050 – UOB

According to UOB Group’s FX Strategists, further retracements in AUD/USD are likely to meet a solid support around 0.7050 in the short term.

Key Quotes

24-hour view: “We highlighted yesterday that ‘downward momentum has improved a tad’ and we expected AUD to ‘to trade with a downward bias towards 0.7075’. Our expectations did not materialize as AUD edged to a low of 0.7084. The downward bias appears to be intact and a breach of 0.7075 would not be surprising. However, the major support at 0.7050 is likely out of reach. Resistance is at 0.7115 followed by 0.7130.”

Next 1-3 weeks: “There is no change in our view from Wednesday (01 Dec, spot at 0.7135). As highlighted, the downside risk in AUD is still intact but any further weakness is likely limited to a test of 0.7050. On the upside, a breach of 0.7165 (‘strong resistance’ level was at 0.7205 yesterday) would indicate that AUD weakness from early last week has run its course.”