The current upside momentum could motivate AUD/USD to surpass the key barrier at 0.6900 in the short-term horizon, note Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: We stated yesterday that “strong boost in momentum is likely to lead to further AUD strength and the levels to watch are 0.6820 and 0.6870.” We held the view that “the 0.6870 is likely out of reach today.” The anticipated AUD strength exceeded our expectations as it surged to a high of 0.6895. While clearly overbought, the AUD’s strength could extend above June’s peak of 0.6900. Today, 0.6950 is likely out of reach. Support is at 0.6850, followed by 0.6830. 

Next 1-3 weeks: We turned positive in AUD yesterday (14 Jul, spot at 0.6790).” We highlighted that AUD “could rise to 0.6820, as high as 0.6870.” The pace of the advance exceeded our expectations as AUD rocketed to a high of 0.6895 before closing higher by a whopping 1.50% (NY close of 0.6890). The price actions suggest AUD is likely to break June’s peak of 0.6900. A break of this solid resistance level will shift the focus to 0.6950 and 0.7030. The upward pressure is intact as long as AUD stays above 0.6760 (‘strong support’ level was at 0.6680 yesterday).