The current price action is likely part of a consolidation phase, most likely between 0.6435 and 0.6475. In the longer term, the risks to the AUD have shifted to the downside; the 0.6380 level is expected to provide significant support, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

After the AUD fell to a low of 0.6399 two days ago, we highlighted yesterday that ‘AUD weakness could retest the 0.6400 level before stabilisation is likely.' This should remain below 0.6460, with minor resistance at 0.6445. Our view remains unchanged, as the AUD traded within a 0.6422/0.6455 range, closing at 0.6452. The current price action is likely part of a consolidation phase, most likely between 0.6435 and 0.6475.

We revised our view on AUD to negative yesterday (05 Dec, spot at 0.6430), indicating that ‘risks for AUD have shifted to the downside.' to face significant support at 0.6380.' We also indicated that ‘to sustain the increase in momentum, AUD must not break above the ‘strong resistance' level, currently at 0.6490.' in our view.

Source: FXStreet