UOB’s Quek Ser Leang and Lee Sue Ann highlight lingering downside momentum in AUD/USD after recent declines, with the pair hovering just above 0.7120 support. A clear break below 0.7120 could open the way toward 0.7095, while resistance is seen at 0.7150–0.7165. Over the next few months, risks remain tilted lower, with significant support near 0.7040.

Downside bias while 0.7120 stays vulnerable

"24-HOUR VIEW: AUD fell more than we expected on Tuesday. Yesterday, when AUD was at 0.7135, we indicated that “while strong momentum suggests AUD may test the support at 0.7120 today, oversold conditions suggest that a continued drop below this level is unlikely.” We also stated that “a breach of 0.7155 (minor resistance is at 0.7145) would indicate that the decline in AUD is stabilising.” However, AUD did not quite test 0.7120, as it dipped to 0.7123, rebounded to 0.7148 before closing little changed at 0.7133 (+0.08%). Despite the relatively quiet price action, lingering downward momentum suggests AUD could test and potentially break below 0.7120. Resistance is at 0.7140 and 0.7150."

"1-3 WEEKS VIEW: Yesterday (04 Jun, spot at 0.7135), we highlighted that “there has been a tentative increase in downward momentum, and if AUD breaks and holds below 0.7120, it could lead to a drop to 0.7095.” We added, “the probability of AUD breaking clearly below 0.7120 will remain intact as long as 0.7185 (‘strong resistance’ level) is not breached.” We continue to hold the same view, but we are revising the ‘strong resistance’ level to 0.7165."

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