AUD/USD likely to remain side-lined in the short-term – UOB
FX Strategists at UOB Group keep the consolidative view unchanged around AUD/USD for the time being.
24-hour view: “We expected AUD to ‘drift lower’ yesterday but it slumped to a low of 0.6674 before recovering slightly. Despite the relatively rapid drop, downward momentum has not improved by much. That said, it is too early to expect a recovery. AUD is more likely to consolidate and trade at these lower levels, expected to be between 0.6670 and 0.6715.”
Next 1-3 weeks: “After trading in a quiet manner and closing around 0.6715 for a few days, AUD lurched lower and dropped to 0.6674 yesterday (18 Feb). The underlying tone has weakened but at this stage, we continue to hold the same view from last Thursday (13 Feb, spot at 0.6730) wherein AUD is expected to trade sideways within a 0.6650/0.6780 range. That said, after yesterday’s price action, the bottom of the expected range is more vulnerable but AUD has to register a NY closing below 0.6650 or it may not have enough momentum to embark on a sustained decline. To look at it another way, the current sideway-trading phase is likely to be resolved by another down-leg in AUD.”