There is scope for Australian Dollar (AUD) to weaken further to 0.6430; the major support at 0.6405 is unlikely to come under threat today. In the longer run, the price action suggests there is scope for AUD to test 0.6405, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Major support at 0.6405 is unlikely to come under threat

24-HOUR VIEW: "We expected AUD to “trade between 0.6450 and 0.6510” yesterday. However, after rising to a high of 0.6502, AUD staged a surprisingly sharp drop to 0.6436. While the sharp drop appears excessive, there is scope for AUD to weaken further to 0.6430. The major support at 0.6405 is unlikely to come under threat today. On the upside, resistance levels are at 0.6465 and 0.6480."

1-3 WEEKS VIEW: "We have been expecting AUD to 'trade with a downward bias' since early this week. Yesterday (20 Nov, spot at 0.6485), we indicated that 'while the downward bias remains intact, AUD must close below 0.6440 before a move to 0.6405 can be expected'. We added, 'the likelihood of AUD closing below 0.6440 will remain intact as long as 0.6525 (‘strong resistance’ level) is not breached'. AUD subsequently fell and closed at 0.6440 (-0.60%). Although we would have preferred a more decisive close below 0.6440, the price action suggests AUD could test 0.6405. The ‘strong resistance’ is now at 0.6510 instead of 0.6525.