AUD/USD still bullish, could test 0.7740 – UOB

FX Strategists at UOB Group stay bullish on the Aussie Dollar and believe the pair could visit 0.7700 and above in the next weeks.

Key Quotes

24-hour view: “We highlighted yesterday that the rally in AUD is “severely overbought” and added “a clear break of the major 0.7700 resistance would come as a surprise”. While the expectation was not wrong, the subsequent sharp and rapid drop from a high of 0.7672 was unexpected. From here, the decline has scope to extend lower but 0.7590 is major support and would not be an easy level to break (next support is at 0.7565). Resistance is at 0.7640 followed by 0.7675”.

Next 1-3 weeks: “Just when we thought that 0.7700 was within reach, AUD staged a surprisingly sharp and rapid pullback after touching a high of 0.7673. Upward momentum has been dented but another attempt to move towards 0.7700 is not ruled out just yet. A break above 0.7700 would still shift the focus to 0.7740. That said, the ‘stop-loss’ level previously indicated at 0.7590 appears to be too close for comfort and 0.7565 seems to be a more appropriate level from here”.