United Overseas Bank’s (UOB) Quek Ser Leang reports AUD/USD briefly tested 0.7069 before retreating sharply to 0.6984, with the move seen as overdone. Intraday, the Australian Dollar is expected to range between 0.6980 and 0.7030. On a 1–3 week view, risks remain to the upside but advances are likely to face firm resistance at 0.7075, while a breach of 0.6980 would ease upside pressure.

Range trade under key resistance

“24-HOUR VIEW: After AUD opened and traded on firm footing yesterday, we noted that “upward momentum is building, but not significantly.” We pointed out that AUD “could rise further, but based on the prevailing momentum, any advance is unlikely to reach the major resistance at 0.7075.” AUD appeared to have risen briefly to 0.7069 before staging a sharp retreat to a low of 0.6984. The sharp retreat appears to be overdone, and instead of continuing to decline today, AUD is more likely to trade in a range between 0.6980 and 0.7030.”

“1-3 WEEKS VIEW: The following excerpt from our update yesterday (03 Aug, spot at 0.7040) remains valid: “While AUD closed higher for the fifth straight week last Friday (0.7020, +0.49%), upward momentum has not increased much. However, the risk remains on the upside, but any advance is expected to face firm resistance at 0.7075. To put it another way, AUD must break clearly above this level before further sustained advances can be expected. On the downside, a breach of 0.6980 would mean that the upside pressure has eased.””