June 21, 2023 12:4 PM

AUD/USD is expected to consolidate - UOB

AUD/USD is expected to consolidate - UOB

According to UOB Group's Markets Strategist and Senior Economist, the AUD/USD has likely entered a consolidation period.

Important Quotes

24-hour perspective: The expectation for the AUD to stabilize yesterday was incorrect as it fell to a low of 0.6754 and then recovered. Despite the bounce, the AUD's weakness has yet to settle. Today, AUD might revisit the 0.6755 level before stabilizing, unless it breaks over 0.6845 (minor resistance is at 0.6820). The next support level at 0.6700 is unlikely to be challenged.

Next 1-3 weeks: As of last Friday (16 June, spot at 0.6875), we stated that "AUD strength is still in place." "After rising sharply and quickly in the last week, AUD is approaching a solid resistance zone between 0.6915 and 0.6940," we continued, adding that "this resistance zone may not be easy to break." AUD went below our strong support level of 0.6790 yesterday (20 Jun). The breakdown of strong support' signals that the AUD's strength has come to an end. It is too early to anticipate a protracted decline. For the time being, we see the AUD trading in a band of 0.6700 to 0.6880.