According to UOB Group economists Lee Sue Ann and Quek Ser Leang, the potential for further drop in the AUD/USD looks to be losing steam at the present.
— Hokusai FX (@Hokusai_fx) August 7, 2023
24-hour perspective: On Thursday, the AUD fell to 0.6514 before rising again. We stated on Friday that “Oversold conditions, coupled with early signs of slowing momentum, suggest low downside risk” and predicted that the Australian dollar will trade between 0.6595 and 0.6553. In NY trading, the Australian dollar fell to 0.6541, surged back to 0.6610, and then fell back to finish the day at 0.6571 (+0.33%). The price fluctuations seem to be consolidating, and we continue to anticipate that the Australian dollar will trade in a range today, most likely between 0.6540 and 0.6600.
— kenyan_alpha (@dan_gachoka) August 7, 2023
Next 1-3 weeks: For the past two weeks or so, we have maintained a bearish AUD perspective. In our most recent narrative, which was published on Thursday (03 August, spot at 0.6535), we stated that “while severely oversold, the weakness in AUD could extend to the year’s low near 0.6460.” AUD recovered on Friday, reaching a high of 0.6610. There is lessening likelihood of AUD falling to 0.6460 as the downward impetus begins to wane.
Only a breach of 0.6620 (a no change “strong resistance” level) would signal that the AUD is not losing more ground, though.