United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann keep a bearish outlook on AUD/USD after the pair plunged to 0.7080, confirming a break below the 0.7100 support. They see scope for a move toward 0.7065 and potentially 0.7030 in the coming weeks, while capping rebounds below 0.7180 and highlighting a broader bearish structure toward 0.6850/0.6870.

Australian Dollar under sustained pressure

"24-HOUR VIEW: After AUD rebounded strongly to a high of 0.7184 on Monday, we highlighted yesterday, when AUD was at 0.7175, that “the current price movements are likely part of a range-trading phase between 0.7140 and 0.7205.” However, instead of trading in a range, AUD plummeted to a low of 0.7080. The sharp drop appears to be excessive, but there is room for AUD to retest 0.7080. A break below this level is not ruled out, but the major support at 0.7065 is likely out of reach for now. Resistance is at 0.7125, followed by 0.7140."

"1-3 WEEKS VIEW: We revised our AUD view to negative last Friday (15 May, spot at 0.7215). On Monday (18 May, spot at 0.7135), we highlighted that “the rapid increase in downward momentum suggests AUD is likely to break the major support at 0.7100.” We added, “the next support below 0.7100 is at 0.7065.” Yesterday, AUD broke below 0.7100 and reached a low of 0.7080. Not surprisingly, the outlook for AUD remains negative, and from here, a break of 0.7065 could open up the way for a move to 0.7030. We will maintain our negative AUD view as long as 0.7180 (‘strong resistance’ level previously at 0.7205) is not breached."

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