AUD Prices May Pull Back towards 0.7120, Say UOB Analysts

Australian Dollar (AUD) prices may see a pullback in the coming days and weeks, according to UOB analysts Quek Ser Leang and Lee Sue Ann. The pair briefly broke above 0.7200 to reach 0.7208 before reversing course to close at 0.7158 on Friday.

The analysts expect further price action towards 0.7145, but note that a clear break below this level appears unlikely. Resistance is seen at 0.7170 and 0.7185, with support at 0.7120 over the next few weeks.

UOB's positive view on AUD since the start of the month has been based on upward momentum, but recent price action suggests that this strength may have ended. The analysts point to negative divergence in momentum indicators and overbought conditions as reasons for a potential pullback towards 0.7120.