AUD/USD Expected to Pull Back Before Another Breakout

According to United Overseas Bank's (UOB) analysts Quek Ser Leang and Lee Sue Ann, the Australian Dollar (AUD/USD) has pulled back from its recent high of 0.7208 but is now rebounding. The duo notes that the AUD has corrected sharply after rising to 0.7208 last Friday, before closing at 0.7158 (-0.50%). Yesterday, they predicted a pullback toward 0.7145, which indeed occurred when the AUD declined less than expected to 0.7152 before rebounding.

However, despite the short-term correction, the medium-term technical picture still favors a break above 0.7200, targeting the year-to-date high near 0.7280. The analysts believe that the month-long Australian Dollar strength has ended, opening scope for a deeper pullback toward 0.7120.

While the increase in momentum suggests AUD could rebound further, UOB's analysts expect it to stay within a 0.7155/0.7180 range for now. They caution that a clear break below 0.7145 appears unlikely based on prevailing momentum.