AUD/USD: Downward momentum picks up pace – UOB

AUD/USD risks further weakness in the near term and faces strong support at 0.6565, suggest Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group,

Key Quotes

24-hour view: “Yesterday, we held the view that AUD ‘could weaken further but it is unlikely to challenge the major support at 0.6565’. Our expectations did not materialize as it traded sideways between 0.6596 and 0.6635. Momentum indicators are flattish and further sideways trading appears likely. Expected range for today, 0.6605/0.6650.”

Next 1-3 weeks: “Our narrative from two days ago (26 Apr, spot at 0.6635) is still valid. As highlighted, downward momentum is beginning to build and AUD is likely to edge lower in the coming days. However, any decline is likely to face solid support at the year-to-date low near 0.6565. All in all, AUD is likely to stay under pressure as long as 0.6670 (no change in ‘strong resistance’ from yesterday) is not breached. Looking ahead, if AUD breaks clearly below 0.6565, the focus will shift to the round-number support level of 0.6500.”