AUD: Bearish Outlook Maintained Below 0.7140 - UOB

UOB strategists Quek Ser Leang and Lee Sue Ann maintain a bearish outlook for AUD/USD below 0.7140, but acknowledge that the probability of the pair reaching the 0.7050 target has diminished significantly. At the time of writing, AUD/USD is trading at 0.70814, below the previously expected intraday range of 0.7095–0.7125.

**Short-Term: Range-Bound Trading with Narrowed Downside**

UOB notes that AUD/USD has recently exhibited range-bound characteristics around 0.7115, with an expected intraday range of 0.7095–0.7125. The bank turned bearish early last week, targeting 0.7050, but its latest assessment shows that while the bearish stance is maintained given the lack of a decisive break above the strong resistance at 0.7140, the probability of actually reaching 0.7050 has decreased markedly. Market reports indicate that the Aussie briefly rose to 0.7140 before quickly retreating, failing to establish effective upward momentum.

**Medium-Term: Room for Upside Toward Year-to-Date Highs**

From a 1–3 month perspective, UOB strategists see room for the Aussie to continue rising toward the year-to-date high of 0.7277. This implies that the current bearish assessment is more of a short-term tactical view rather than a reversal of the medium-term trend. The strategists emphasize that as long as the 0.7140 resistance level remains intact, the short-term bearish framework stays valid, but once that level is decisively broken, the view will need to be reassessed.

**Key Level: 0.7140 as the Bull-Bear Divider**

UOB defines 0.7140 as a "strong resistance level," and its outcome directly determines the validity of the short-term directional view. The current price of 0.70814 leaves roughly 60 pips of room to that resistance level, while the reduced probability of reaching the 0.7050 target below suggests the pair is more likely to oscillate within the 0.7080–0.7140 range for now. According to UOB's analysis, if 0.7140 is decisively broken, the bearish stance will no longer hold; conversely, if the pair falls below 0.7080, the 0.7050 target remains relevant.