AUD/USD: Risks keep pointing to the upside – UOB

Further gains in AUD/USD appear likely in the short-term horizon, with strong hurdle at the 0.7850 level, commented FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our view for AUD yesterday was that it ‘could breach 0.7815 but the next major resistance at 0.7850 is likely out of reach’. While AUD rose to 0.7818, the subsequent pullback was relatively sharp as it dropped to 0.7751 during NY hours. The sharp pullback appears to be overdone and AUD is unlikely to weaken further. For today, AUD is more likely to consolidate and trade within a 0.7755/0.7805 range.”

Next 1-3 weeks: “We continue to hold the same view from yesterday (29 Apr, spot at 0.7800). As highlighted, ‘the risk is shifting to the upside but at this stage, AUD may find it difficult to break the solid resistance at 0.7850’. On the downside, a breach of 0.7740 (‘strong support’ level) would indicate that the upside risk has dissipated.”