Australian Dollar: Gains capped at 0.7070 against US Dollar, says UOB

After reaching 0.7065, AUD/USD closed at 0.7055, outperforming as overbought conditions intensified, according to UOB strategists Quek Ser Leang and Lee Sue Ann. A test of 0.7070 remains possible intraday, although they doubt the pair can sustain a move above it and see little prospect of 0.7095 coming under pressure. Over 1–3 weeks, fresh momentum could take the pair beyond 0.7070, but whether it can reach 0.7095 remains unclear.

Australian Dollar advance meets resistance

"24-HOUR VIEW: AUD popped to a high of 0.7055 during the early Asian session yesterday. When it was at 0.7035, we indicated that “upward momentum is building, but not significantly.” We also highlighted that “there is scope for AUD to test 0.7060,” but we held the view that “the major resistance at 0.7070 is likely out of reach.” AUD rose more than expected to 0.7065 before settling at 0.7055 (+0.42%). While conditions are overbought, AUD could test 0.7070 today. Given the overbought conditions, a continued rise above this level appears unlikely. The next resistance at 0.7095 is also unlikely to come under threat. Support is at 0.7030."

"1-3 WEEKS VIEW: Following our positive AUD view from the middle of last week, we highlighted two days ago (27 Oct, spot at 0.7020) that “upward momentum is starting to slow, and a break below 0.6995 (‘strong support’ level) would indicate that 0.7070 is not coming into view.” Yesterday, AUD rose to a high of 0.7065. While the renewed momentum suggests AUD could move above 0.7070, it is too early to tell whether it can strengthen sufficiently to carry AUD toward 0.7095. On the downside, the ‘strong support’ level is now at 0.7020."

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