AUD/USD: short term low in place? – UOB Group

FX Strategists at UOB Group noted the likelihood that the pair could have carved a short term low.

Key Quotes

24-hour view: “Instead of trading sideways (as expected yesterday), AUD staged a strong rebound and hit a high of 0.7542. While the recovery appears to be running ahead of itself, a probe of the strong 0.7565/70 resistance would not be surprising. At this stage, a clear break above this level is not expected. Support is at 0.7510 followed by 0.7485”.

Next 1-3 weeks: “The strong rebound in AUD yesterday that hit a high of 0.7543 came as a surprise. While the ‘stop-loss’ for our bearish view at 0.7570 is still intact, the risk of a short-term low has increased considerably. Unless AUD can break and hold below 0.7485 by end of today’s NY session, a break of 0.7570 would not be surprising and would indicate that AUD has made a short-term low at 0.7473 on Tuesday (01 May). Looking further ahead, a break of 0.7570 suggests that AUD has moved into a correction/consolidation phase (too early to expect a major bullish reversal)”.