In the opinion of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, AUD/USD could break above the 0.6900 hurdle in the short-term horizon.
24-hour view: We highlighted last Friday that “While clearly overbought, the AUD’s strength could extend above June’s peak of 0.6900.” We noted, “Support is at 0.6850, followed by 0.6830.” Our view did not materialize, as AUD fell from 0.6895 to 0.6831 and then closed at 0.6839 (0.74%). The price movement is likely part of a consolidation phase. Today, AUD is likely to trade in a range of 0.6815/0.6870.
Next 1-3 weeks: Our update from last Friday (14 Jul, spot at 0.6880) still stands. As highlighted, AUD is likely to break June’s peak of 0.6900. A break of this level will shift the focus to 0.6950 and 0.7030. That said, overbought short-term conditions are likely to lead to a couple of days of consolidation. The upward pressure is intact as long as AUD stays above 0.6760 (no change in ‘strong support’ level from last Friday).