In the opinion of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, AUD/USD should keep the side-lined trade in place in the next few weeks.

Key Quotes

24-hour view: AUD dropped briefly to a low of 0.6642 and then rebounded quickly to close higher by 0.31% (0.6692). While the rebound lacks momentum, it could extend to 0.6720 before the risk of a pullback increases. The major resistance at 0.6770 is not expected to come into view. Support is at 0.6675, followed by 0.6655. 

Next 1-3 weeks: In our most recent narrative from last Friday (30 Jun, spot at 0.6610), we indicated that while the outlook for AUD is still negative, it must break clearly below 0.6590 before further sustained decline is likely. AUD did not break 0.6590, as it rebounded over the past few days. Downward momentum has eased and AUD is likely to trade in a range of 0.6620/0.6770 for the time being.