Australian Dollar: Upside risks grow toward 0.6980 against US Dollar – UOB

United Overseas Bank’s (UOB) Quek Ser Leang notes AUD/USD rebounded strongly from 0.6923 to 0.6959, with rapidly increasing upward momentum. The bank now sees upside risks toward 0.6970–0.6980 intraday, with supports at 0.6945 and 0.6935. Over the next 1–3 weeks, the risk of a break above 0.6980 is rising while AUD holds above strong support at 0.6900.

Building momentum with nearby resistance

"24-HOUR VIEW: The following are excerpts from our update yesterday: “There has been a tentative build-up in downward momentum. Today, the bias for AUD is tilted to the downside, but given the lacklustre momentum, any decline is likely limited to a test of 0.6910. Resistance is at 0.6945, followed by 0.6955.” While AUD subsequently declined, it rebounded strongly from 0.6923 and reached a high of 0.6959. Rapidly increasing upward momentum suggests upside risks today, even though the major resistance at 0.6980 could be just out of reach (there is another resistance at 0.6970). Support is at 0.6945, followed by 0.6935."

"1-3 WEEKS VIEW: We have held a neutral AUD view since last Wednesday (01 Jul, spot at 0.6915). We indicated that AUD “is likely to trade between 0.6870 and 0.6980 for the time being.” Yesterday, AUD rose to a high of 0.6959. Upward momentum is building tentatively, and the risk of AUD breaking above 0.6980 is increasing and will continue to increase as long as AUD holds above the ‘strong support’ level, now at 0.6900. Looking ahead, the next level to watch above 0.6980 is 0.7005."