United Overseas Bank (UOB) analysts Quek Ser Leang and Lee Sue Ann have highlighted that the Australian Dollar (AUD) remains under short-term downside risk against the US Dollar (USD) following a sharp decline. The AUD/USD pair dropped to a low of 0.7075 and closed at 0.7087, representing a 0.64% decrease. The analysts note that while the decline appears overdone, there are no signs of stabilization yet, and the risk remains skewed to the downside for the next 24 hours, with the pair expected to trade within a 0.7070–0.7115 range [1].
On a 1-3 week horizon, UOB maintains a negative stance on the AUD, projecting a move toward 0.7050 unless the resistance level at 0.7140 is reclaimed. The analysts previously indicated that a close below 0.7100 would be necessary for a further decline to 0.7050, a condition that has now been met with the recent close at 0.7087. Only a breach of the 0.7140 resistance level would suggest that the AUD is stabilizing [1].
The report underscores that short-term conditions are oversold, but further weakness is not ruled out. The market implication is that traders should remain cautious, as the AUD may continue to face downward pressure unless there is a significant reversal above the identified resistance [1].
CONCLUSION
UOB analysts see continued downside risk for the Australian Dollar, with a target of 0.7050 unless resistance at 0.7140 is reclaimed. The market remains cautious, with no clear signs of stabilization in the short term.