The rebound in AUD/USD is seen facing a tough hurdle in the 0.6430 area, suggested FX Strategists at UOB Group.
24-hour view: “AUD rose sharply last Thursday but spent most of last Friday trading in a relatively narrow range between 0.6312 and 0.6369. The combination of overbought conditions and waning momentum indicates limited upside risk in AUD for today. AUD is more likely to continue to consolidate even though the weakened underlying suggests a lower trading range of 0.6295/0.6360.”
Next 1-3 weeks: “In our update from last Wednesday (08 Apr, spot at 0.6150), we indicated that ‘upward momentum has improved but AUD has to close above 0.6230 before a sustained advance can be expected’. AUD subsequently closed at 0.6232 on Wednesday before staging a strong rally that led to a high of 0.6369 on Friday. The rapid rise has moved into overbought territory but this does not ruled out further gains from here. That said, any advance is expected to encounter solid resistance at 0.6430. On the downside, only a breach of 0.6230 would indicate that a short-term top is in place.”