Increasing momentum suggests further upside pressure; the major resistance at 0.6555 is likely out of reach. In the longer run, bias remains on the upside, but it remains to be seen if AUD can break clearly above 0.6555, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Bias remains on the upside

24-HOUR VIEW: "The following are excerpts from our update yesterday: 'There has been a slight increase in momentum. Today, there is potential for AUD to test 0.6535. Given the current mild momentum, a clear break above this level is unlikely. The major resistance at 0.6555 is also unlikely to come under threat. Support is at 0.6500; a breach of 0.6485 would indicate that the current mild upward pressure has eased.' Our analysis was not wrong, as after dipping briefly to 0.6490, AUD rose to 0.6533. Upward momentum has increased further, indicating further upside pressure. However, the major resistance at 0.6555 is likely out of reach. There is another resistance level at 0.6540. Today’s support levels are at 0.6510 and 0.6490."

1-3 WEEKS VIEW: "We have expected a positive bias in AUD since early last week. In our latest narrative from last Friday (06 Jun, spot at 0.6510), we indicated that 'the bias remains on the upside, but it remains to be seen if AUD can break clearly above 0.6555.' While there has been a slight increase in short-term upward momentum, currently, it is still unclear whether AUD can break clearly above 0.6555. Overall, only a breach of 0.6480 (‘strong support’ level previously at 0.6470) would indicate that the likelihood of AUD breaking above 0.6555 has faded."

Source: Fxstreet