AUD/USD faces a tough resistance around 0.6915/40 – UOB

The continuation of the uptrend in AUD/USD is expected to meet solid resistance in the 0.6915/40 band for the time being, suggest UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: Last Friday, we indicated that “there is room for AUD to strengthen further but overbought conditions suggest a break of 0.6915 is unlikely today.” Our view was correct as AUD rose to 0.6900 before easing off to close at 0.6876 (-0.11%). Conditions remain overbought and this combined with tentative signs of slowing momentum suggest AUD is unlikely advance further. Today, AUD could ease further but it is unlikely to threaten the support at 0.6830 (minor support is at 0.6850). Resistance is at 0.6890, followed by the rather strong level at 0.6915. 

Next 1-3 weeks: Our update from last Friday (16 Jun, spot at 0.6875) is still valid. As highlighted, the AUD strength that started more than a week ago is still in place. However, after rising sharply and swiftly in the past one week or so, AUD is approaching a solid resistance zone between 0.6915 and 0.6940. This resistance zone might not be ease to break. On the downside, a breach of 0.6790 (no change in ‘strong support’ level) would indicate that AUD is not ready to break above the resistance zone.