AUD at Risk of Further Decline Towards 0.7050: UOB

According to United Overseas Bank's (UOB) analysts Quek Ser Leang and Lee Sue Ann, the Australian Dollar is at risk of further decline. They note that AUD/USD dropped to 0.7075 on Tuesday after an overdone decline, but closed at 0.7087. The pair is expected to stay within a 0.7070-0.7115 range for the next 24 hours with risks still skewed lower.

The analysts maintain a negative stance on AUD/USD, looking for a move toward 0.7050 unless resistance at 0.7140 is reclaimed. They point out that even though the sharp decline appears to be overdone, there are no signs of stabilisation just yet. As such, the risk remains on the downside today.

On a 1-3 week horizon, UOB's analysts expect AUD/USD to drop to 0.7050, citing that only a breach of 0.7140 would mean that AUD is stabilising. They previously indicated that AUD could decline toward 0.7120 and warned that further weakness is not ruled out.