Australian Dollar: Upside risk intact above support against US Dollar – UOB

UOB’s Quek Ser Leang and Lee Sue Ann note AUD/USD rebounded to close around 0.7062 after the RBA left its cash rate at 4.35%. Intraday, they see scope for the Australian Dollar to edge higher, though a sustained break above 0.7075 is unlikely. Over 1–3 weeks, upside risk persists as long as AUD holds above 0.7025, with potential toward 0.7100 on a close above 0.7075.

Australian Dollar holds constructive tone

"24-HOUR VIEW: We expected AUD to “trade sideways between 0.7040 and 0.7070” yesterday. AUD subsequently fell briefly to 0.7038, rebounded to 0.7070 before closing at 0.7062 (+0.11%). The slight increase in upward momentum suggests AUD could edge higher, but based on the current momentum, a sustained break above 0.7075 appears unlikely. On the downside, support is at 0.7050, followed by 0.7040."

"1-3 WEEKS VIEW: Since early last week, we have been of the view that the risk for AUD is on the upside. Yesterday (11 Aug, spot at 0.7055), we highlighted that “the upside risk will remain intact as long as AUD holds above 0.7025 (‘strong support’ level).” There is no change in our view. Looking ahead, should AUD close above 0.7075, it could continue to rise toward 0.7100."

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