AUD Pulls Back Toward 0.7120: UOB Sees Limited Downside

Australian Dollar (AUD) prices have been on a rollercoaster ride in recent days. According to UOB's Quek Ser Leang and Lee Sue Ann, AUD briefly broke above 0.7200 to 0.7208 before reversing to 0.7158.

The analysts expect further pullback toward 0.7145, but with limited downside and resistance at 0.7170/0.7185. In their view, the prior AUD strength has ended, and there is scope for a deeper retreat toward 0.7120.

Last Thursday, AUD rose to a high of 0.7198, but momentum indicators showed negative divergence. Despite this, UOB highlighted that 'there is scope for AUD to rise above 0.7200', although it was unlikely to maintain a foothold above this level.

In the next weeks, Quek and Lee believe that AUD's upward pressure has eased, suggesting a pullback toward 0.7120 is possible.