The Aussie Dollar could now be headed for a deeper pullback, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “AUD traded between 0.6766 and 0.6806 yesterday, higher and wider than our expected range of 0.6760/0.6795. The subsequent firm daily closing in NY (0.6799, +0.40%) has improved the underlying tone and this could lead to AUD testing the strong 0.6820 resistance. For today, a sustained rise above this level is unlikely (next resistance is at 0.6850). Support is at 0.6780 followed by the low near 0.6765”.

Next 1-3 weeks: “While the relatively robust rebound of +0.40% (NY close 0.6799) has dented the downward momentum, only a break of 0.6820 (no change in ‘strong resistance’ level) would indicate that the pull-back from the 0.6895 high (Sep 12) has stabilized. Until then, further weakness in AUD is not ruled out just yet even though as highlighted on Monday (23 Sep, spot at 0.6770), only a break of 0.6755 would shift the focus to the next support at 0.6700. Unless AUD can move and stay below 0.6765 within these 1 to 2 days, the prospect for further AUD weakness to 0.6700 is not high”.