AUD/USD: The next level to monitor is 0.6530 – UOB Group

Outlook for the Australian Dollar (AUD) remains negative; the next level to monitor is 0.6530, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

AUD moves towards 0.6530

24-HOUR VIEW: “Yesterday, we expected AUD to dip below the major support at 0.6590. However, we were of the view that it ‘is unlikely to be able to maintain a foothold below this level.’ AUD dropped more than expected to 0.6578 and then closed at 0.6582 (-0.51%). AUD continues to decline in early Asian trade today. The impulsive decline is likely to continue. The next level to watch is at 0.6530. On the upside, any rebound is likely to remain below 0.6605 (minor resistance is at 0.6590).

1-3 WEEKS VIEW: “We turned negative in AUD relatively early, in the middle of last week (17 Jul, spot at 0.6730), but we did not expect it dropped this much in such a short span of time. Note that AUD closed lower for the eight consecutive days yesterday. In our update yesterday (24 Jul, spot at 0.6615), we indicated that AUD ‘remains negative, but does not seem to have the potential to decline significantly.’ While we correctly identified the trend, we underestimated its strength. From here, we will continue to hold a negative AUD view as long as 0.6630 is not breached (‘strong resistance’ level was at 0.6675 yesterday). On the downside, the next level to monitor is 0.6530.”