The Australian dollar has plunged to a fresh low of 0.6883 against the US dollar before staging a minor rebound to 0.6901, according to analysts at United Overseas Bank. Currency strategists Quek Ser Leang and Lee Sue Ann report the pair is now deeply oversold, suggesting the sharp downward momentum may pause temporarily. The analysts expect AUD/USD to consolidate in a tight range between 0.6880 and 0.6920 in the near term as the market digests recent losses.
The selloff reflects ongoing weakness in the Australian currency amid persistent US dollar strength and mounting concerns about Chinese economic growth, which directly impacts Australia’s export-driven economy. While technical indicators suggest a brief respite from further declines, the overall trend remains vulnerable with limited upside potential in the current environment. Traders should watch for any break below 0.6880 support or above 0.6920 resistance for directional signals.
FXnCO Insight
Range-bound trading presents short-term opportunities, but traders should prepare for renewed downside risk if support at 0.6880 fails to hold.
Source: FXStreet