United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann have highlighted a sudden selloff in the Australian Dollar (AUD) against the US Dollar (USD), with the AUD/USD pair dropping to 0.7156. Intraday momentum points to further losses, with targets set at 0.7140, although 0.7120 is seen as a strong support level for now [1]. Over the next one to three weeks, UOB expects the pair could decline toward 0.7120 unless it rebounds above 0.7210, which is considered a 'strong resistance' level [1].
Previously, the AUD traded between 0.7210 and 0.7238 and closed largely unchanged at 0.7217 (+0.01%). However, instead of continuing to trade in a range as anticipated, the AUD staged a sharp selloff, reaching a low of 0.7156. The rapid increase in downward momentum suggests further downside is possible, but given oversold conditions, the AUD is unlikely to reach the major support at 0.7120 immediately. To maintain the current momentum, the AUD must hold below 0.7190, with minor resistance at 0.7175 [1].
UOB's strategists note that after several days of edging higher and reaching a high of 0.7238, the AUD plunged and closed 0.83% lower at 0.7157 yesterday. The bank's outlook indicates that unless the AUD breaks above 0.7210, further declines toward 0.7120 are likely. If the AUD does break above 0.7210, it would signal a return to range-bound trading [1].
CONCLUSION
The Australian Dollar has experienced a sharp selloff, with UOB strategists forecasting further downside toward 0.7120 unless a rebound above 0.7210 occurs. Market momentum remains negative, but strong support at 0.7120 could limit further losses. Traders should watch for a break above 0.7210 to signal a shift back to range-bound trading.