The Australian Dollar (AUD) extended its recent gains against the US Dollar (USD), but further upside may be limited in the near term, according to UOB Group’s FX strategists Quek Ser Leang and Peter Chia. While short-term momentum remains positive, the pair is unlikely to break above 0.6630 today, they noted.
Short-Term Outlook: Limited Room Beyond 0.6630
UOB analysts observed that the AUD performed stronger than expected on Tuesday, rising to 0.6591 before closing at 0.6586 and continuing higher in early Asian trade.
Although the pace of the rally appears stretched, they believe the AUD could still firm modestly, with minor resistance at 0.6615. However, a clear break above 0.6630 is deemed unlikely for now.
Support is seen at 0.6585, followed by 0.6570.
Medium-Term View: Bias Remains Constructive
Over the next one to three weeks, the analysts maintain a bullish bias on the pair. They first turned positive on the AUD on October 28, expecting gains toward 0.6575, with an outside chance of reaching 0.6595. The subsequent price action confirmed continued strength, reinforcing the outlook for further appreciation.
As long as the pair holds above 0.6535, previously 0.6515, UOB sees the next key resistance at 0.6630 as the level to watch for potential breakout confirmation.