The Australian Dollar (AUD) could test 0.6660 before a pullback is likely; Key resistance at 0.6685 is likely to be out of reach. In the long term, further strength of the Australian dollar is not ruled out; It remains to be seen whether 0.6685 is within reach, noted UOB Group FX analysts Kwik Ser Liang and Peter Chia.
Further strength of the Australian dollar is not ruled out
24-hour view: “Yesterday we noted that the Australian dollar “appears to have entered a consolidation phase between 0.6605 and 0.6645”. However, after briefly falling to 0.6610, the Australian dollar rebounded to a high of 0.6655 before closing at 0.6643 (+0.28%). Despite the relatively strong rebound, bullish momentum did not increase significantly. Test the zone 0.6660 Before a pullback is likely and major resistance at 0.6685 is likely to be out of reach to maintain momentum build-up, the Australian dollar must stabilize above 0.6615, with minor support at 0.6625.
1-3 week view: “Tracking our positive view of the Australian dollar since late last month, we highlighted two days ago (08 Dec, spot at 0.6635) that ‘while further AUD strength is not ruled out, the advance that began late last month appears to have run its course, and it remains to be seen whether the momentum is strong enough to reach the next resistance at 0.6685.’ While the AUD made a new high at 0.6655 yesterday, there was no Significant increase in momentum In other words, our view is generally unchanged, only a break of the 0.6590 level (with no change in the “strong support” level) would indicate that the outlook for the Australian dollar has turned to neutral.
