AUD is likely to trade in a range of 0.6460/0.6510. In the longer run, slight increase in upward momentum is likely to lead to a higher range of 0.6440/0.6540 rather than a sustained advance, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Slight increase in upward momentum is likely to lead to a higher range

24-HOUR VIEW: "We expected AUD to consolidate in a range of 0.6405/0.6535 last Friday. Our view of consolidation was incorrect, as after dipping to 0.6416, AUD soared, reaching a high of 0.6501. The sharp rise appears to be excessive, and instead of continuing to rise today, AUD is more likely to trade in a range of 0.6460/0.6510."

1-3 WEEKS VIEW: "Last Wednesday (20 August, spot at 0.6455), we indicated that 'downward momentum is increasing, and the risk for AUD is tilted to the downside toward 0.6420.' After AUD dropped below 0.6420, in our most recent narrative from Friday (22 Aug, spot at 0.6420), we highlighted that AUD 'must first close below 0.6420 before a move to 0.6375 can be expected.' However, AUD did not close below 0.6420 as it surged to a high of 0.6501. The breach of our ‘strong resistance’ level at 0.6465 indicates that downward momentum has eased. There has been an increase in upward momentum, but not significantly, and this is likely to lead to a higher range of 0.6440/0.6540 rather than a sustained advance."