United Overseas Bank’s Quek Ser Leang and Lee Sue Ann note AUD/USD surged to 0.6992 after an earlier dip, with strong short-term momentum pointing to further gains. They see scope for a test of 0.6995, while the major resistance at 0.7015 is key. Over 1-3 weeks, upward momentum is rebuilding, though it is unclear if the pair can break 0.7015; medium-term bias remains negative below 0.6835.

Australian Dollar tests key resistance

"24-HOUR VIEW: On Monday, AUD traded within a range of 0.6914/0.6970, closing on a soft note at 0.6917 (-0.48%). When it was at 0.6920 in the early Asian session yesterday, we indicated that “the slight increase in downward momentum suggests AUD could edge lower.” The subsequent price movements did not unfold as expected. AUD dipped to a low of 0.6913 and then recovered. During the NY session, AUD lifted off and soared to a high of 0.6992. While the sharp rise appears excessive, there is room for AUD to test 0.6995. The major resistance at 0.7015 is unlikely to come under threat. To keep the momentum going, AUD must hold above 0.6945, with minor support at 0.6960."

"1-3 WEEKS VIEW: In our most recent narrative from last Friday (10 Jul, spot at 0.6935), we highlighted that “the recent build-up in upward momentum has faded,” and AUD “is likely to trade in a range between 0.6890 and 0.6975.” Yesterday, AUD soared and broke above 0.6975 with a high of 0.6992. Upward momentum is starting to build again, but it is too early to determine whether AUD can break above the significant resistance at 0.7015. On the downside, a breach of the ‘strong support’ level, now at 0.6930, would indicate that the build-up in momentum has faded."

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