Australian Dollar Sees Modest Rebound but Faces Capped Gains

United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann observed that the Australian Dollar (AUD) showed resilience on Monday, closing near 0.6970 after a modest rebound. They anticipate slight gains in the near term but expect the AUD/USD pair to remain capped below 0.6985.

In their 24-hour view, UOB noted that the AUD traded within a narrower range of 0.6933 to 0.6974, closing 0.30% higher at 0.6972. While there is a tentative increase in upward momentum, it is not strong enough to signal a sustained advance. Today, the AUD is expected to edge higher but stay within a 0.6945 to 0.6985 range, making a clear break above 0.6985 unlikely.

Looking ahead to the 1-3 week outlook, UOB highlighted that downward momentum is slowing. A break above 0.6985 would indicate that the previously identified support level at 0.6866 is unlikely to be tested, though medium-term risks remain skewed lower.