Instead of continuing to decline, Australian Dollar (AUD) is more likely to trade in a range of 0.6480/0.6540. In the longer run, AUD is expected to trade in a range, most likely between 0.6460 and 0.6560, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

AUD is expected to trade in a range

24-HOUR VIEW: "AUD rose to a high of 0.6559 two days ago. Yesterday, we highlighted the following: 'Although upward momentum has not increased further, there are also no clear signs of a pullback. Overall, AUD may continue to drift higher today, but it is likely to remain within a range of 0.6540/0.6570.' We did not anticipate the sudden sharp decline that sent AUD to a low of 0.6483. AUD rebounded from the low to close at 0.6520 (-0.53%). The rebound from oversold conditions suggests that, instead of continuing to decline, AUD is more likely to trade in a range between 0.6480 and 0.6540."

1-3 WEEKS VIEW: "We have held a positive AUD stance since early last week (see annotations in the chart below). Yesterday (02 Sep, spot at 0.6555), we stated that AUD 'could continue to edge higher, and the levels to watch are 0.6570 and 0.6595.' However, AUD staged a surprisingly sharp drop that reached a low of 0.6483. The breach of our ‘strong support’ level at 0.6520 indicates that upward pressure has fizzled out. There has been an increase in downward momentum, but it is not sufficient to suggest a sustained decline. For the time being, we expect AUD to trade in a range, most likely between 0.6460 and 0.6560."