Sharp decline could test 0.6475 before stabilisation can be expected. In the longer run, Australian Dollar (AUD) is still trading in a range, probably between 0.6455 and 0.6555, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Sharp decline might test 0.6475 before stabilisation

24-HOUR VIEW: "AUD rose to a high of 0.6563 two days ago. Yesterday, when it was at 0.6550, we highlighted that 'while conditions are approaching overbought, AUD could test 0.6570 before the risk of a pullback increases.' We also highlighted that 'we do not expect 0.6600 to come into view today.' Although our view was not wrong, as AUD rose to a high of 0.6569, we did not expect the subsequent sharp drop from the high that reached a low of 0.6483. This time around, the decline could test 0.6475 before stabilisation can be expected. The next support at 0.6455 is unlikely to come under threat. On the upside, resistance levels are at 0.6520 and 0.6540."

1-3 WEEKS VIEW: "We indicated yesterday (14 August, spot at 0.6550) that 'there has been a tentative buildup in momentum, and AUD could rise to 0.6575, as long as the ‘strong support’ level, currently at 0.6500 holds.' AUD subsequently rose to 0.6569 and then plummeted below our ‘strong support’ level, reaching a low of 0.6483. The price action has negated our positive view. The failure to break above 0.6575 indicates that AUD is still trading in a range, probably between 0.6455 and 0.6555."