AUD/USD bearish, still expected to grind lower – UOB

The Aussie Dollar is seen losing further ground in the near term, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected a lower AUD yesterday but indicated “the major 0.7145 support is unlikely to yield so easily”. In line with expectation, AUD briefly touched a low of 0.7145 before staging a robust recovery. Downward pressure has eased with the rebound and 0.7145 is deemed as a short-term low and is not expected to come into the picture for today. From here, AUD is more likely to consolidate and trade sideways to slightly higher, expected to be within a 0.7170/0.7230 range”.

Next 1-3 weeks: “We have been bearish AUD since Monday (03 Sep, spot at 0.7185) but indicated that we are mindful of the long-term 0.7145/60 support zone. AUD tested this support zone with a low of 0.7158 on Tuesday (04 Sep) and 0.7145 yesterday (05 Sep). The ‘failure’ to crack through this major support has resulted in a loss in downward momentum, especially from a short-term perspective. That said, until the ‘stop-loss’ level at 0.7260 is taken out, we are not ruling out further attempts to break the major support. However, this has to happen within these few days as a prolonged consolidation would lead to further loss in momentum and increase the risk of an interim bottom”.