Rather than continuing its downward trajectory, the Australian Dollar (AUD) is poised to trade sideways, likely between 0.6670 and 0.6710 today. UOB Group FX analysts Quek Ser Leang and Peter Chia note that in the longer term, current price actions are part of a broader consolidation phase between 0.6655 and 0.6745.
24-HOUR VIEW: “Following Thursday’s drop to 0.6682, our Friday analysis suggested AUD might retest the 0.6680 level but was unlikely to reach 0.6655 based on momentum at the time. This assessment proved generally accurate; AUD briefly dipped to 0.6664 during the New York session before recovering to close at 0.6687 (-0.18%). With bearish momentum appearing to fade today, AUD is expected to range-trade, probably confining itself between 0.6670 and 0.6710, instead of extending its decline.”
1-3 WEEKS VIEW: “Our view remains unchanged from last Friday (09 Jan, spot at 0.6700), where we characterized current movements as part of a range-trading phase between 0.6655 and 0.6745. Looking ahead, however, the underlying tone is softening. Therefore, the risk of AUD breaking below 0.6650 appears higher than the chance of it reaching 0.6745.
