An increase in bullish momentum will likely see the Australian Dollar (AUD) trading in a higher range of 0.6685/0.6730 rather than a sustained advance. In the longer term, the Australian dollar is likely to trade in a range at the moment, most likely between 0.6640 and 0.6730, UOB Group FX analysts Kwek Ser Liang and Peter Chia noted.
The Australian dollar is likely to move within a specific trading range at the moment
24-hour view: “When the Australian dollar was at 0.6685 at the start of the Asian session yesterday, we indicated that it ‘may drift lower and test 0.6670’. We also noted that ‘although a break below this level has not been ruled out, based on current momentum, any further decline is unlikely to reach the key support level at 0.6640.’ While our view was not wrong, as the Australian dollar fell to a low of 0.6663, we did not We expect the subsequent sharp rise to the high of 0.6719. The increase in momentum is not strong enough to indicate a sustained advance, instead, the Australian dollar is likely to trade in a higher range at 0.6685/0.6730 today.
1-3 week view: “Here are excerpts from our update yesterday (05 Jan, spot at 0.6685). “Although the Australian dollar rose late last month to a 14-month high of 0.6727, it has since struggled to build on those gains. The bullish momentum has eased, and this, combined with overbought conditions, suggests that the Australian dollar is likely to trade in a range at the moment, most likely between Although bullish momentum was renewed somewhat with yesterday’s sharp bounce, it is not enough to indicate a continuation of the rally just yet.
