Instead of continuing to advance, Australian Dollar (AUD) is more likely to consolidate between 0.6590 and 0.6630. In the longer run, AUD is neutral now, and it is likely to trade between 0.6545 and 0.6655 for now, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

AUD is neutral now

24-HOUR VIEW: "Two days ago, we expected AUD to rise. After AUD rose more than we expected, we highlighted the following yesterday: 'Our view of a higher AUD was not wrong, even though it rose more than expected, reaching a high of 0.6581. There is still room for AUD to rise but given that there is no significant increase in upward momentum, any advance is unlikely to break clearly above the strong resistance at 0.6600.' The anticipated advance exceeded our expectation, as AUD broke above 0.6600 and rose sharply to a high of 0.6629. The sharp rise appears to be overdone. This, combined with overbought conditions, suggests that instead of continuing to advance, AUD is more likely to consolidate today, probably between 0.6590 and 0.6630."

1-3 WEEKS VIEW: "After holding a negative AUD stance for more than a week, we cautioned yesterday (30 Sep, spot at 0.6575) that 'downward momentum is slowing, and a break above the ‘strong resistance’ at 0.6600 would mean that the weakness in AUD has stabilised.' AUD subsequently rose to a high of 0.6629. As stated, the weakness in AUD has stabilised. From here, we are neutral on AUD and expect it to trade between 0.6545 and 0.6655."