The current price movements are likely part of a sideways trading phase between 0.6570 and 0.6605. In the longer run, the odds of AUD breaking below 0.6555 are increasing, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Odds of AUD breaking below 0.6555 are increasing

24-HOUR VIEW: "Following AUD’s price action two days ago, we indicated yesterday, when AUD was at 0.6585, that “the increasing downward momentum suggests AUD is likely to head lower and test the support level at 0.6555.' We were not wrong, as AUD dipped to 0.6557 before recovering to end the day largely unchanged at 0.6586 (+0.07%). The current price movements are likely part of a sideways trading phase, most likely between 0.6570 and 0.6605."

1-3 WEEKS VIEW: "After holding a neutral stance on AUD since the start of the month, we stated yesterday (08 Oct, spot at 0.6580) that 'downward momentum is starting to build, and the odds of AUD breaking below 0.6555 are increasing and will continue to increase as long as the ‘strong resistance’ level, now at 0.6630, holds.' AUD subsequently dropped to a low of 0.6557 before recovering. While there has been no further increase in downward momentum, we will maintain our view as long as 0.6330 (no change in ‘strong resistance’ level) remains intact."