UOB’s Quek Ser Leang and Lee Sue Ann report that AUD/USD rebounded sharply after recent weakness, with the pair swinging between 0.7100 and 0.7168 and now trading near 0.7155. They see scope for further gains but doubt a clear break above 0.7175, viewing current moves as part of a 0.7100–0.7215 range while longer-term charts still point to downside toward 0.6765 if 0.6850/0.6870 breaks.

Australian Dollar stabilises in broad range

"24-HOUR VIEW: AUD swung between 0.7100 and 0.7168 last Thursday. On Friday, we indicated that “we are not able to derive much from the price action,” and we held the view that AUD “could trade between 0.7120 and 0.7175.” AUD subsequently traded between 0.7117 and 0.7152. AUD closed at 0.7129 (-0.29%) but rose sharply on the open today. The rapid rise has scope to extend, but a clear break of the major resistance at 0.7175 is unlikely. Support is at 0.7145, followed by 0.7130"

"1-3 WEEKS VIEW: We have held a negative AUD stance since the middle of the month. In our most recent narrative from last Thursday (21 May, spot at 0.7150), we noted that “downward momentum is slowing rapidly,” and we pointed out that “a breach of 0.7180 (‘strong resistance’ level) would indicate that the weakness in AUD has stabilised.” AUD rose sharply today, and although our ‘strong resistance’ has not been breached yet, downward momentum has faded. We are neutral on AUD now, and we view the current price movements as part of a range-trading phase between 0.7100 and 0.7215."

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