Recovery in Australian Dollar (AUD) has room to test 0.6565; a continued rise above this level is unlikely. In the longer run, the price action continues to suggest AUD weakness, likely toward 0.6500, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Price action continues to suggest AUD weakness

24-HOUR VIEW: "Last Friday, we were of the view that AUD 'could test the major support at 0.6500.' We pointed out that 'resistance levels are at 0.6550 and 0.6565.' Our expectation did not materialise, as AUD recovered from 0.6521 to 0.6551. The recovery has room to test 0.6565. Given that there has been no clear increase in upward momentum, a continued rise above 0.6565 is unlikely. The next resistance at 0.6600 is not expected to come into view. On the downside, support levels are at 0.6535 and 0.6525."

1-3 WEEKS VIEW: "We reiterated our negative AUD stance last Friday (26 Sep, spot at 0.6535), indicating that 'the price action continues to suggest AUD weakness, likely toward 0.6500.' However, should AUD break above 0.6600 (no change in ‘strong resistance’ level), it would indicate that the weakness in AUD from early last week has stabilised."