May not have enough momentum to test 0.6870 – UOB Group

The Australian dollar (AUD) is likely to trade sideways, possibly in a range of 0.6800/0.6855. In the longer term, there is still room for the AUD to rise further, but there may not be enough momentum for it to challenge 0.6870, note UOB Group FX analysts Quek Ser Leang and Peter Chia.

Border between 0.6800 and 0.6855

24 HOURS: “We expected the AUD to trade sideways yesterday. Our expectations were incorrect as the AUD rose to 0.6853, closing at its highest level this year (0.6838, +0.45%). Despite the advance, the upside momentum has barely picked up and the AUD is unlikely to rise much further. Today, we still expect the AUD to trade sideways, probably in a range of 0.6800/0.6855.”

WEEKS 1-3 VIEW: “We continue to maintain the same view as last Friday (September 20, point at 0.6800). As pointed out, while there is still room for the AUD to continue rising, it may not have enough momentum to challenge significant resistance at 0.6870. On the downside, a break of 0.6770 (the strong support level was yesterday at 0.6740) would mean that the upward pressure that started early last week has abated.”