Australian Dollar: Near-term upside against US Dollar remains within a capped range – UOB

A modest intraday upside bias remains in place for AUD/USD following Friday’s consolidation, according to United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann, though they expect gains to be limited to the 0.7010–0.7045 range. Their outlook for the next 1–3 weeks remains positive, with room for a rise towards 0.7070 as long as strong support at 0.6985 holds. This contrasts with a longer-term bearish EMA signal that points to the July low of 0.6923.

Can the Australian Dollar extend gains within a limited range?

"24-HOUR VIEW: When AUD was at 0.7015 in the early Asian session last Friday, we indicated that “the current price movements are likely part of a consolidation phase between 0.6995 and 0.7030.” AUD then dipped to 0.7005, edged up to 0.7039 before closing at 0.7033. The slight increase in upward momentum suggests that the bias for AUD is tilted to the upside. However, any advance is likely to stay within a 0.7010/0.7045 range."

"1-3 WEEKS VIEW: We turned positive on AUD last Wednesday (21 Oct, spot at 0.7005), indicating that AUD “could rise toward 0.7035.” After AUD tested 0.7035, we highlighted on Thursday (22 Oct, spot at 0.7025) that AUD “could advance further, though the next technical target at 0.7070 may not come into view so soon.” We will continue to hold the same view as long as 0.6985 (no change in ‘strong support’ level) is not breached."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)