UOB’s Quek Ser Leang and Lee Sue Ann flag that AUD/USD posted its second-largest one‑day loss of the year, dropping toward 0.7040. Near term, the pair may test 0.7020, though a sustained break below is seen as unlikely. Over a 1–3 week horizon, they expect further weakness toward 0.7000, while resistance is now around 0.7080/0.7105.

Australian Dollar under sustained pressure

"24-HOUR VIEW: After our expectation for AUD to test 0.7120 did not materialise on Thursday, we highlighted the following on Friday: “AUD did not quite test 0.7120, as it dipped to 0.7123, rebounded to 0.7148 before closing little changed at 0.7133 (+0.08%). Despite the relatively quiet price action, lingering downward momentum suggests AUD could test and potentially break below 0.7120. Resistance is at 0.7140 and 0.7150.” Our view of a lower AUD was not wrong, as after it rose to 0.7144, it then staged a dramatic decline that reached a low of 0.7038. The outsized drop appears excessive, but there is a chance for AUD to test 0.7020. A sustained drop below this level is unlikely, and the next support at 0.7000 is also unlikely to come into view. Resistance is at 0.7060, followed by 0.7080."

"1-3 WEEKS VIEW: Our most recent narrative was from last Thursday (04 Jun, spot at 0.7135), when we highlighted that “there has been a tentative increase in downward momentum, and if AUD breaks and holds below 0.7120, it could lead to a drop to 0.7095.” While our view of a weaker AUD was correct, we did not anticipate the steep sell-off on Friday that reached a low of 0.7038. AUD closed at 0.7043, down by a whopping 1.27%. The price action suggests that AUD could weaken to 0.7000. We will maintain this view as long as 0.7105 (‘strong resistance’ level was at 0.7165 last Friday) is not breached."

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