United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann report AUD/USD dipped to 0.7122 before a strong rebound to 0.7176, leaving intraday price action in a 0.7140–0.7180 range. Downward momentum is fading and a break above 0.7190 would confirm 0.7120 is out of reach. On a 1–3 month horizon, the pair is seen poised to clear 0.7200, targeting the year-to-date high near 0.7280.

Australian Dollar consolidates after rebound

“24-HOUR VIEW: While we expected AUD to “edge lower” yesterday, we pointed out that “based on prevailing momentum, the major support at 0.7120 is likely out of reach.” We added that “resistance is at 0.7160; a breach of 0.7170 would mean that the current downward pressure has eased.” Our view was not wrong as AUD declined to 0.7122. However, we did not expect the subsequent strong rebound that reached a high of 0.7176. The downward pressure has eased, and today, we expect AUD to trade in a range, most likely between 0.7140 and 0.7180.”

“1-3 WEEKS VIEW: We highlighted on Monday (31 Aug, spot at 0.7160) that “the almost month-long AUD strength has ended.” We also highlighted that AUD “could pull back further toward 0.7120.” Yesterday, AUD dipped to within a couple pips of 0.7120 with a low of 0.7122 before rebounding strongly to close at 0.7170 (+0.34%). Downward momentum is starting to ease, and if AUD breaks above 0.7190, it would mean that 0.7120 is out of reach.”