The Australian Dollar (AUD) is likely to move within a narrow range against the US Dollar (USD), according to currency analysts at UOB Group. They predict the AUD/USD pair will fluctuate between 0.6400 and 0.6450 in the short term.
UOB’s FX experts, Quek Ser Leang and Peter Chia, noted that their previous expectation for the AUD to continue rising was proven wrong. Instead of climbing, the AUD dropped sharply to 0.6392 before recovering slightly to close at 0.6424, down 0.53% on the day.
Despite this fall, the analysts say there is no strong downward momentum. As a result, they expect the AUD to trade sideways within the 0.6400 to 0.6450 range today.
Looking ahead over the next one to three weeks, the outlook for the AUD remains uncertain. On May 14, when the AUD was at 0.6470, UOB had stated that the currency needed to break above 0.6515 to continue rising. After some upward movement on May 19 and 20, the chance of breaking this level seemed higher.
However, the AUD then slipped below a key support level at 0.6400, hitting a low of 0.6392. This drop suggests the possibility of further gains has weakened.
Due to this choppy price action, UOB expects the AUD to remain in a wider range between 0.6370 and 0.6480 for the near future. The mixed signals reflect uncertainty in the market, making a clear directional move unlikely for now.
In summary, the AUD/USD pair is set to trade sideways in the short term, with a mixed medium-term outlook. Traders should watch key support and resistance levels closely as the currency navigates this uncertain environment.
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