There seems to be scope for AUD/USD to weaken to the 0.6575 region in the short-term horizon, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “Our view for AUD to consolidate yesterday was incorrect as it broke below the major support at 0.6630, dropped to a low of 0.6605 before rebounding. Downward pressure has eased somewhat but AUD could drop towards the 0.6600 level again before a more sustained recovery is likely. The next support at 0.6575 is unlikely to come under threat. Resistance is at 0.6645, followed by 0.6465.”

Next 1-3 weeks: “We have held the same view since Monday (15 May, spot at 0.6650) wherein ‘while the bias for AUD is tilted to the downside, it has to break and stay below 0.6630 before a sustained decline to 0.6575 is likely’. Yesterday (18 May), AUD dropped to a low of 0.6605. Downward momentum has not improved much but we see a chance for AUD to drop to 0.6575. Overall, only a break of 0.6685 (‘strong resistance’ level previously at 0.6705) would indicate that AUD is not ready to head lower to 0.6575