UOB analysts Quek Ser Leang and Lee Sue Ann report that the Australian Dollar (AUD) continues to experience downside momentum against the US Dollar (USD), with the AUD/USD pair hovering just above the key 0.7120 support level following recent declines [1]. On Tuesday, the AUD fell more than anticipated, dipping to 0.7123 before rebounding to 0.7148 and closing little changed at 0.7133, a modest gain of 0.08% [1]. Despite this relatively quiet price action, analysts note that downward momentum persists, and a clear break below the 0.7120 support could open the way for further declines toward 0.7095 [1].
Resistance levels are identified at 0.7140 and 0.7150, with a 'strong resistance' level now revised to 0.7165, up from the previous 0.7185 [1]. The analysts maintain that as long as the AUD/USD does not breach the 0.7165 resistance, the probability of a clear break below 0.7120 remains intact [1]. Over the next few months, risks are seen as tilted to the downside, with significant support near 0.7040 [1].
Market implications suggest that the AUD may remain under pressure in the near term, especially if the 0.7120 support is breached, potentially leading to further declines. No specific analyst opinions or forward-looking statements beyond the technical outlook are provided in the source [1].
CONCLUSION
The Australian Dollar remains vulnerable to further declines against the US Dollar, with key support at 0.7120 under persistent pressure. Unless resistance at 0.7165 is breached, downside risks are expected to prevail, potentially targeting 0.7095 or lower.