The current price movements are likely part of a 0.6405/0.6435 consolidation phase. In the longer run, Australian Dollar (AUD) must first close below 0.6420 before a move to 0.6375 can be expected, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Current price movements are likely part of a 0.6405/0.6435 range

24-HOUR VIEW: "After AUD dropped sharply for two days in a row, we noted yesterday that 'downward momentum appears to be slowing.' We indicated that AUD 'is unlikely to weaken much further, 'and we expected AUD to 'trade in a lower range of 0.6420/0.6455.' AUD subsequently traded between 0.6415 and 0.6437, closing at 0.6422 (-0.18%). The price movements are likely part of a consolidation phase. Today, we expect AUD to trade between 0.6405 and 0.6435."

1-3 WEEKS VIEW: "We highlighted on Wednesday (20 Aug, spot at 0.6455) that 'downward momentum is increasing, and the risk for AUD is tilted to the downside toward 0.6420.' We pointed out that AUD 'must break and hold below this level before further sustained decline can be expected.' Yesterday, AUD dropped to a low of 0.6415 and closed at 0.6422 (-0.18%). While further AUD weakness is not ruled out, it must first close below 0.6420 before a move to 0.6375 can be expected. The likelihood of AUD closing below 0.6420 will remain intact as long as 0.6465 (‘strong resistance’ level was at 0.6485 yesterday) is not breached."