AUD/USD: Likely to trade in a range of 0.5945/0.6110 – UOB Group

Instead of continuing to drop, Australian Dollar (AUD) is more likely to trade in a range of 0.5945/0.6110 vs US Dollar (USD). In the longer run, further declines are not ruled out; given the deeply oversold conditions, it is unclear if AUD can reach the next support at 0.5870, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Further declines are not ruled out

24-HOUR VIEW: "Following the dramatic plunge last Friday, AUD continued to decline yesterday, albeit at a slower pace, closing lower by 0.94% at 0.5988. The sharp drop appears to be overdone. This, combined with early sign of slowing momentum indicates that instead of continuing to drop, AUD is more likely to trade in a range of 0.5945/0.6110 today."

1-3 WEEKS VIEW: "In our latest update from last Friday, 05 Apr, when AUD was at 0.6330, we indicated that AUD 'must break and hold above the significant resistance at 0.6410 before further advances can be expected.' Not only did AUD not break above 0.6410, but it also staged a dramatic drop over the past two days. Although further declines are not ruled out, given the deeply oversold conditions, it is unclear if AUD can reach the next support at 0.5870. Overall, only a breach of 0.6185 would suggest that the current downward pressure has eased."