AUD/USD faces potential upside to the 0.6810 region – UOB

Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group note AUD/USD could now reclaim the 0.6800 hurdle at beyond.

Key Quotes

24-hour view: “While we expected AUD to edge higher last Friday, we held the view that ‘it is unlikely to break clearly above 0.6740’. The anticipated AUD strength exceeded our expectations as AUD soared to 0.6757 before closing on a firm note at 0.6750 (+0.84%). Further AUD strength is not ruled out but overbought conditions suggest the next major resistance at 0.6810 is not expected to come under threat (there is another resistance at 0.6775). Support is at 0.6725, followed by 0.6695.”

Next 1-3 weeks: “Our most recent narrative was from last Wednesday (03 May, spot at 0.6660) wherein ‘as long as AUD holds above 0.6610, it could edge higher to 0.6740’. We indicated that ‘the odds of a sustained rise above 0.6740 are not high.’ Last Friday (05 May), AUD soared and broke above 0.6740 (high of 0.6757). Upward momentum has improved considerably and AUD is likely to advance further. The next level to aim for is 0.6810. Overall, AUD is likely to continue to rise as long as it stays above 0.6670 (‘strong support’ level previously at 0.6610).”