AUD/USD rebound expected to move near 0.6830 – UOB

FX Strategists at UOB Group suggest the corrective recovery in AUD/USD has scope to move near the 0.6830 area.

• "24-hour view: Our view yesterday was AUD “could advance further but expect strong resistance at 0.6800”. The expectation was not wrong as AUD touched 0.6801 before settling just below the high (closed at 0.6797). While the strong advance over the past two days appears to be ‘tiring’, there is room for AUD to edge higher from here. That said, a break of the solid 0.6825 resistance is unlikely. Support is at 0.6780 followed by 0.6760.
• Next 1-3 weeks: We detected the weakened underlying tone… and cautioned that “only a NY closing below 0.6690 would suggest AUD could move to 0.6640”. AUD subsequently touched 0.6688 before soaring to end the day sharply higher at 0.6763 (+0.69%). The strong gain (largest 1-day rise in 3 weeks) coupled with the bounce from the strong 0.6690 level suggest AUD could be trying to form a bottom. That said, it is too early to expect a sustained up-move. For now, we view the price action as a ‘corrective rebound’ but there appears to be ample scope for AUD to test the strong 0.6825 resistance. Looking forward, if AUD were to register a NY close above 0.6850, it would indicate that last month’s low of 0.6678 is a more significant bottom than currently expected."