AUD/USD still room for a test of 0.7700 – UOB

The stance on the Aussie Dollar remains bearish and could test the 0.7700 handle vs. the buck in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected the weakness in AUD to be 'limited' to 0.7745 but it bounced strongly from a low of 0.7759 last Friday. A short-term low is deemed to be in place and AUD is expected to trade sideways to slightly higher from here, likely within a 0.7785/0.7845 range”.

Next 1-3 weeks: “We turned bearish last Thursday (08 Feb, spot at 0.7815) and held the view that while the decline in AUD is ‘over-extended’, there is scope for further weakness towards 0.7745 (with lower odds for extension to 0.7700). AUD rebounded from a low of 0.7759 last Friday and shorter-term indicators suggest the start of a consolidation phase that could last for a couple of days. As long as the ‘stop-loss’ at 0.7920 (level unchanged) is not taken out, another attempt to move towards 0.7740 still seems likely. On a shorter-term note, 0.7870 is already a strong resistance”.