The Australian dollar is under fresh selling pressure, with analysts at United Overseas Bank (UOB) warning that AUD/USD could break below the major 0.7100 support level following a sharp decline toward 0.7140.
UOB strategists Quek Ser Leang and Lee Sue Ann have turned more bearish on the pair, citing deteriorating momentum as the key driver. In their latest note, the analysts identify 0.7065 as the next significant downside level if 0.7100 fails to hold.
What This Means for Australian Traders
For Australian traders holding AUD-denominated accounts or running long AUD/USD positions, a confirmed break of 0.7100 would mark a meaningful deterioration in the local currency’s near-term outlook. The 0.7100 level has historically acted as a significant floor for the pair, and a sustained move below it could weigh on import costs and broader risk sentiment tied to Australian assets.
The sell-off toward 0.7140 reflects broader pressure on the Aussie dollar, which remains sensitive to global risk appetite, iron ore prices, and shifts in US dollar strength. Any renewed bid in the USD โ particularly on the back of US macro data or Federal Reserve commentary โ could accelerate the move lower.
Key Level to Watch
Traders should closely monitor 0.7100 as the line in the sand. A daily close below this level would likely confirm the bearish thesis and open the path toward 0.7065. Conversely, a recovery back above 0.7140 would ease immediate downside pressure and signal the sell-off may be losing steam.
Directional bias: Bearish โ momentum is firmly to the downside and UOB’s technical outlook suggests the path of least resistance remains lower while price holds below 0.7140.
Source: FX Street