AUD/USD could still test the 0.6620 region – UOB

FX Strategists at UOB Group suggested AUD/USD could grind lower and test 0.6620 if 0.6670 is breached.

Key Quotes

24-hour view: “Expectation for AUD to ‘trade sideways’ was incorrect as it lurched lower and cracked last year’s 0.6670 low. The rapid improvement in downward momentum suggests further AUD weakness towards 0.6640. On the upside, only a move above 0.6705 would indicate that the current downward pressure has eased.”

Next 1-3 weeks: “Our view for a ‘short-term bottom’ in AUD from last Thursday (06 Feb, spot at 0.6750) was proven wrong quickly as AUD cracked several strong support levels with ease (AUD took out the 2019 low of 0.6670 as it dropped to 0.6662). The price action suggests further AUD weakness is likely from here. The next support is at 0.6620. For the next few days, the ‘strong resistance’ at 0.6740 is expected to be strong enough to cap any short-term recovery in AUD.”

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