UOB analysts see short-term upside for the Australian dollar but expect strong resistance at 0.7075 to cap further advances.
The Australian dollar rebounded to close at 0.7047 against the US dollar, recovering from an earlier sharp retreat. UOB analysts note building short-term momentum but warn gains may struggle beyond 0.7075, with support at 0.7020 needed to sustain upward pressure.
Earlier this week, AUD/USD dropped to a low of 0.6984 before reversing course. Analysts had previously flagged the retreat as overdone, expecting a trading range of 0.6980 to 0.7030. Instead, the pair climbed to 0.7049, closing 0.67% higher.
Over a 1-3 week horizon, upside risks persist, though advances are likely to face firm resistance at 0.7075. A break below 0.6990 would invalidate the current bullish outlook, according to the analysts.