Australian Dollar (AUD) does not appear to have enough momentum to continue to decline vs US Dollar (USD); it is more likely to trade in a range of 0.6430/0.6485. In the longer run, the loss in upward momentum indicates the likelihood of AUD reaching 0.6550 is low, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Likelihood of AUD reaching 0.6550 is low

24-HOUR VIEW: "In the early Asian session yesterday, when AUD was at 0.6480, we expected it to 'consolidate in a range between 0.6455 and 0.6510.' However, AUD edged to a low of 0.6435. While the weakness has not quite stabilised, AUD does not appear to have enough momentum to continue to decline. Today, AUD is more likely to trade in a range of 0.6430/0.6485."

1-3 WEEKS VIEW: "On Monday (26 May, spot at 0.6495), we indicated that 'there has been a rapid buildup in momentum.' We expect AUD to 'trade with an upward bias toward 0.6550.' AUD then rose to 0.6537 and pulled back. Yesterday, AUD pulled back further to 0.6435. The loss in momentum indicates the likelihood of AUD reaching 0.6550 is low. From here, if AUD were to break clearly below 0.6430 (no change in ‘strong support’ level), it would mean that it could range trade for a period."