UOB strategists Quek Ser Leang and Lee Sue Ann note AUD/USD failed to retest 0.7135 and instead held in a tight 0.7153–0.7187 band, but still sees a soft tone with scope for a drift toward 0.7150. They expect range trading between 0.7120 and 0.7205 near term, while its broader technical view points to a lower AUD/USD if 0.6850–0.6870 gives way toward 0.6765.

Soft bias but capped by resistance

"24-HOUR VIEW: On Monday, AUD dropped to a low of 0.7135 before recovering. Yesterday, when AUD was at 0.7160, we indicated that “there has been a slight increase in downward momentum, and as long as AUD holds below 0.7190, it could retest the 0.7135 level.” Our view did not materialise, as AUD traded within a range of 0.7153/0.7187, closing at 0.7180 (+0.26%). We continue to detect a soft underlying tone and expect AUD to decline gradually to 0.7150. A breach of this level is not ruled out, but based on the prevailing momentum, the 0.7135 level is unlikely to come under threat. On the upside, resistance is at 0.7190, followed by 0.7205."

"1-3 WEEKS VIEW: In our most recent narrative from last Monday (25 May, spot at 0.7150), we highlighted that “the current price movements are likely part of a range-trading phase between 0.7100 and 0.7215.” While we continue to expect range-trading, a narrower range of 0.7120/0.7205 is likely enough to contain the price movements for now"

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)