FX Strategists at UOB Group expect further upside in in the Aussie Dollar to run out of some steam in the next weeks.

Key Quotes

“The sharp drop to a low of 0.7875 last Friday was unexpected. However, the sharp bounce from the low suggests that downward pressure has eased and AUD has likely moved into a consolidation phase. In other words, expect sideway trading for today, likely within a 0.7880/0.7945 range”.

“While the weak daily closing last Friday clearly suggests that upward momentum is waning, it is too early to expect an end to the bullish phase that started on 14 July (spot at 0.7730). That said, the odds for further AUD strength have diminished but until the stop-loss at 0.7850 is taken out (level unchanged), another push higher towards 0.8000 is not ruled out just yet. We have suggested exiting half of long position previously at 0.7900 on 17 Jul, and those with remaining long should look to exit the rest of their position if there is a move to 0.8000”.