United Overseas Bank’s (UOB) Quek Ser Leang notes AUD/USD has retreated from recent highs after failing to clear resistance near 0.6980. Intraday downside is seen as limited within 0.6900–0.6950, while the 1–3 week outlook still flags tentative upside momentum and rising odds of a break above 0.6980, even as the 1–3 month view remains structurally negative below 0.6835.

Short-term range versus medium-term downside

"24-HOUR VIEW: AUD rose to a high of 0.6955 on Monday. Yesterday, we stated that “the rapidly increasing upward momentum suggests upside risks, even though the major resistance at 0.6980 could be just out of reach.” We noted that “there is another resistance at 0.6970.” We were incorrect, as AUD retreated sharply to a low of 0.6921. While AUD could retreat further, given the lacklustre downward momentum, any decline is likely to be contained within a 0.6900/0.6950 range. In other words, AUD is unlikely to break clearly below 0.6900."

"1-3 WEEKS VIEW: Last Wednesday (01 Jul, spot at 0.6915), we indicated that AUD “is likely to trade between 0.6870 and 0.6980 for the time being.” After AUD rose to 0.6959, we highlighted yesterday (07 Jul, spot at 0.6955) that “upward momentum is building tentatively, and the risk of AUD breaking above 0.6980 is increasing and will continue to increase as long as AUD holds above the ‘strong support’ level, now at 0.6900.” While we did not expect the subsequent sharp retreat in AUD, we will continue to hold the same view for now."

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