United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note AUD/USD is consolidating intraday between 0.7050 and 0.7075 after a brief spike to 0.7091 failed to build momentum. On a 1–3 week view, they maintain that upside risk persists as long as the Australian Dollar holds above strong support at 0.7025, with a close above 0.7075 opening scope toward 0.7100 and a broader resistance zone at 0.7075/0.7090.

Australian Dollar holds constructive bias

“24-HOUR VIEW: AUD rose briefly to 0.7091 on Wednesday and then dropped back down. When AUD was at 0.7065 in the early Asian session yesterday, we pointed out that “the brief advance did not result in any increase in upward momentum,” and we held the view that AUD “is likely to trade in a range between 0.7050 and 0.7085.” However, AUD dipped to 0.7044, rebounded to 0.7067 before settling at 0.7060 (-0.04%). The price movements did not lead to any increase in either downward or upward momentum, and we continue to expect AUD to trade in a range, most likely between 0.7050 and 0.7075.”

“1-3 WEEKS VIEW: Since early last week (as annotated in the chart below), we have been of the view that the risk for AUD is on the upside. Two days ago (11 Aug, spot at 0.7055), we highlighted that “the upside risk will remain intact as long as AUD holds above 0.7025 (‘strong support’ level).” We also highlighted that “should AUD close above 0.7075, it could continue to rise toward 0.7100.” While upward momentum is starting to slow, only a breach of 0.7025 would indicate that the upside risk has faded.”