Australian Dollar: Gains against US Dollar lose momentum near recent highs – UOB

After testing 0.7040, AUD/USD has stalled, with intraday momentum indicators flattening and pointing to consolidation between 0.7005 and 0.7035, according to United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann. The pair’s difficulty in clearing 0.7040 is eroding its earlier upside bias over a 1–3 week horizon. A break below 0.6995 would rule out a move towards 0.7070, while longer-term EMAs continue to signal downside risks towards 0.6923.

AUD/USD consolidates as upward momentum fades

"24-HOUR VIEW: AUD rose to a high of 0.7039 last Friday. When it was at 0.7030 yesterday, we indicated that “the slight increase in upward momentum suggests that the bias for AUD is tilted to the upside.” However, we were of the view that “any advance is likely to stay within a 0.7010/0.7045 range.” AUD then traded between 0.7013 and 0.7040 before settling at 0.7017. Momentum indicators are turning flat, and today, we expect AUD to range-trade, most likely between 0.7005 and 0.7035."

"1-3 WEEKS VIEW: We turned positive on AUD last Wednesday (21 Oct, spot at 0.7005), indicating that AUD “could rise toward 0.7035.” After AUD tested 0.7035, we highlighted on Thursday (22 Oct, spot at 0.7025) that AUD “could advance further, though the next technical target at 0.7070 may not come into view so soon.” Since then, AUD has struggled to move clearly above 0.7040, and upward momentum is starting to slow. From here, a break below 0.6995 (‘strong support’ level previously at 0.6985) would indicate that 0.7070 is not coming into view."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)