Australian Dollar (AUD) is likely to trade in a higher range of 0.6625/0.6655. In the longer run, further AUD strength is not ruled out; it remains to be seen if 0.6685 is within reach, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Further AUD strength is not ruled out

24-HOUR VIEW: "Our view for AUD to 'trade between 0.6585 and 0.6625' last Friday was incorrect. Instead of trading in a range, AUD rose to 0.6649, closing on a firm note at 0.6639 (+0.46%). Negative divergence is starting to form on momentum indicators, and AUD is unlikely to rise much further. Today, AUD is more likely to trade in a higher range of 0.6625/0.6655."

1-3 WEEKS VIEW: "In our most recent narrative from last Thursday (04 Dec, spot at 0.6600), we highlighted that 'momentum remains strong, and AUD could potentially rise to 0.6650'. AUD rose to a high of 0.6649 on Friday. While further AUD strength is not ruled out, the advance that started late last month appears to be overstretched, and it remains to be seen whether momentum is strong enough to reach the next resistance at 0.6685. On the downside, a breach of 0.6590 (‘strong support’ level was previously at 0.6550) would mean that the current upward pressure has eased."