The Australian Dollar (AUD) remains under renewed selling pressure against the US Dollar (USD), with increasing downside momentum suggesting the pair is likely to test the 0.6555 support level, according to UOB Group’s FX strategists Quek Ser Leang and Peter Chia.
The analysts added that in the broader outlook, the odds of a break below 0.6555 are rising, which could open the door to further weakness toward the late-September low near 0.6520.
Short-term view: pressure mounting toward 0.6555
In their 24-hour outlook, UOB analysts noted that when AUD/USD was trading around 0.6615 on Tuesday, they expected the currency to “edge higher within a range of 0.6595/0.6630.”
However, the pair unexpectedly reversed lower, dropping to a low of 0.6579 before closing on a soft note. “The increasing downward momentum suggests AUD is likely to head lower and test the support level at 0.6555,” the analysts wrote. Immediate resistance is now seen at 0.6595 and 0.6610.
Medium-term view: downside bias strengthens
From a one- to three-week perspective, UOB has turned cautiously bearish on the pair. The analysts said they had maintained a neutral view earlier this month, expecting a range between 0.6555 and 0.6640. However, with the AUD now showing signs of accelerating downside momentum, that stance has shifted.
“Downward momentum is starting to build, and the odds of AUD breaking below 0.6555 are increasing,” UOB said. “A clear break below this level would shift focus to the late-September low near 0.6520.” The bank maintains its bearish view as long as strong resistance at 0.6630 holds.
