AUD/USD risks another move lower – UOB
Further losses are seen in the Aussie dollar in the short-term horizon, noted FX Strategists at UOB Group.
24-hour view: “The large and rapid decline in AUD (0.6759, -0.96%) is accompanied by strong momentum. However, the decline is deep in oversold territory and while a dip below the overnight low of 0.6752 would not be surprising, the next support at 0.6725 is likely out of reach. On the upside, only a move above 0.6795 would indicate that current weakness in AUD has stabilized (minor resistance is at 0.6780).
Next 1-3 weeks: “Our latest narrative for AUD was from last Wednesday (22 Jan, spot at 0.6845) wherein the ‘odds for AUD to move below 0.6820 have increased but there is another solid support at 0.6790’. After hovering a few days above 0.6820, AUD sliced through both 0.6820 and 0.6790 yesterday (27 Jan) and plunged to a low of 0.6752. The rapid improvement in momentum suggests further weakness in AUD. That said, severely oversold conditions indicate that the 2019 low at 0.6670 may not come into the picture. All in, AUD is expected to stay on the back foot unless it can reclaim the ‘strong resistance’ level at 0.6830.”