AUD/USD risks a test of 0.7808 if 0.7845/50 is cleared – UOB

FX Strategists at UOB Group believes a breakdown of the mid-0.7800s could allow a visit to the 0.7800 neighbourhood.

Key Quotes

24-hour view: “The 0.7960 resistance remains ‘un-tested’ as AUD eased off quickly from a high of 0.7951. The recent mild upward pressure has eased and the risk has shifted to the downside. However, downward momentum is patchy at best and any weakness from here is likely limited to a test of the 0.7880 support (stronger support is at 0.7850). Resistance is at 0.7930 followed by the still rather strong level of 0.7960”.

Next 1-3 weeks: “AUD has been unable to make much headway on the upside after rebounding strongly from a low 0.7808 last week. The weak daily closing yesterday is enough to indicate that the mild upward pressure over the past several days has eased. From here, all eyes are on the rising trend-line support (connecting the lows of 0.7372 and 0.7570, see chart below) which is currently sitting at 0.7845/50 as a break of this level could presage a deeper decline below the 0.7808 low seen last week. At this stage, the odds for such a move are not high but would continue to improve unless AUD can move above 0.7960 in the next few days. On a shorter-term note, 0.7930 is already a strong resistance”.