Australian Dollar (AUD) could retest the 0.6550 level against US Dollar (USD) before a more sustained and deeper pullback is likely. In the longer run, AUD appears to have moved into a range-trading phase between 0.6430 and 0.6550, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

AUD appears to have moved into a range-trading phase

24-HOUR VIEW: "Last Friday, AUD dropped sharply to 0.6457 before rebounding quickly. Yesterday, we indicated that 'downward pressure appears to have eased with the rebound.' We were of the view that AUD 'is likely to trade in a range between 0.6460 and 0.6520.' Our view of rangetrading was incorrect, as AUD rose to 0.6552 and then pulled back to close up by 0.55% at 0.6524. Despite the pullback, the underlying tone remains firm, and AUD could retest the 0.6550 level before a more sustained and deeper pullback is likely. The major resistance at 0.6580 is unlikely to come into view. Support is at 0.6500; a breach of 0.6480 would indicate that AUD is likely to trade in a range instead of retesting 0.6550."

1-3 WEEKS VIEW: "Last Friday (13 Jun, spot at 0.6495), we highlighted that 'the current price movements are likely the early stages of a range-trading phase, and we expect AUD to trade between 0.6430 and 0.6550 for the time being.' Yesterday (Monday), AUD tested the 0.6550 level, retreating from a high of 0.6552. The price action did not result in an increase in upward momentum, and we continue to hold the same view for now."

Source: Fxstreet