United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann highlight a sharp AUD/USD surge to 0.7178, far above their prior 0.7100–0.7155 range expectation, leaving the pair deeply overbought. They see scope for a test of 0.7190 intraday, but doubt a sustained break higher. On a 1–3 week horizon, further upside toward 0.7220 requires a daily close above 0.7190, with strong support now at 0.7085.

Aussie strength stretched near resistance

"Yesterday, we expected AUD to “trade between 0.7100 and 0.7155.” However, instead of trading in a range, AUD lifted off and soared to a high of 0.7178."

"The sharp rise appears to be excessive, but with no sign of a pause yet, AUD could test the significant resistance at 0.7190 today. Given the deeply overbought conditions, a continued rise above this level appears unlikely."

"To keep the overbought momentum going, AUD must hold above 0.7130, with minor support at 0.7155."

"While the risk remains on the upside, AUD must close above 0.7190 before a move to 0.7220 can be expected. The upward pressure would remain intact as long as AUD holds above 0.7085 (‘strong support’ level was at 0.7060 yesterday)."

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