There is scope for Australian Dollar (AUD) to rise further, but any advance is likely part of a higher range of 0.6810/0.6860. In the longer run, AUD could continue to advance, but the scope for further gains is likely limited. The levels to watch are 0.6860 and 0.6885, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Scope for Australian Dollar to rise further

24-HOUR VIEW: "Our view for AUD to consolidate yesterday was incorrect. Instead of consolidating, AUD surged to a high of 0.6848, closing on a strong note at 0.6842, up by 1.18%. While the outsized rise appears excessive, there is scope for AUD to rise further. However, any advance is likely part of a higher range of 0.6810/0.6860. In other words, AUD is unlikely to break clearly above 0.6860."

1-3 WEEKS VIEW: "We highlighted two days ago (21 Jan, spot at 0.6730) that 'there is a chance for AUD to edge higher and test the significant resistance at 0.6765'. After AUD rose above 0.6765, we highlighted yesterday (22 Jan, spot at 0.6755) that 'upward momentum has increased further, and AUD could test 0.6790 next'. However, instead of testing 0.6790, AUD broke above this level and surged to a high of 0.6845. The rally over the past few days appears to be excessive but with no sign of a pause yet, AUD could continue to advance. That said, the scope for further gains is likely limited. The levels to watch are 0.6860 and 0.6885. On the downside, if AUD breaks below 0.6770, it would indicate that the current strong upward pressure is easing."