United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann note that AUD/USD outperformed on Monday, closing near 0.6970 after a modest rebound. Intraday, they see scope for slight gains but expect the pair to stay capped below 0.6985. Over 1–3 weeks, they judge that downward momentum is slowing and a break above 0.6985 would signal that the previously eyed 0.6866 support is unlikely to be reached, though medium‑term risks remain skewed lower.

Australian Dollar rebound but risks linger

"24-HOUR VIEW: Yesterday, we expected AUD to “trade sideways between 0.6930 and 0.6975.” AUD then traded within a slightly narrower range of 0.6933/0.6974, closing 0.30% higher at 0.6972. The tentative increase in upward momentum is not sufficient to signal a sustained advance. Today, AUD is likely to edge higher, but it is likely to stay within a 0.6945/0.6985 range. In other words, AUD is unlikely to break clearly above 0.6985."

"1-3 WEEKS VIEW: In our most recent narrative from last Friday (02 Oct, spot at 0.6930), we highlighted that “while the weakness that started in the middle of last month remains intact, given the deeply oversold conditions, any further decline may fall short of the next major support at 0.6866.” Downward momentum is starting to slow, and a break above 0.6985 (no change in ‘strong resistance’ level) would indicate that 0.6866 is out of reach."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)