AUD/USD Weekly Outlook

AUD/USD edged to new 24 years high of 0.9541 last week but failed to sustain above prior high of 0.9469. Instead, AUD/USD fell sharply to as low as 0.9290 since then and is now pressing outer channel support (now at 0.9309). From a short term angle, initial bias remains on the downside this week as long as 0.9373 minor resistance holds. Further break of 0.9271 will indicate that rise from 0.9031, as well as that from 0.8953 has possibly both completed. In such case deeper decline should be seen. On the upside, strong rebound from 0.9271 and break of 0.9373 resistance will keep the outer rising channel intact and thus, suggest that rise from 0.8953 is still in force. Retest of 0.9541 high should then be seen in such case.

In the bigger picture, outlook is tricky as AUD/USD fails to sustain above 0.9469 high despite making new 24 year high at 0.9541. Also, upside momentum is so far unconvincing with bearish divergence conditions in daily MACD & RSI too. as well as weekly MACD and RSI too. Focus should now be on the short term rising trend line (0.7675 to 0.8512, now at 0.9031). At long as this trend line support holds, recent up trend should still be in force. Such rally is treated as resumption of long term up trend from 0.4773 (01 low) is still expected to extend further to next medium term target of 100% projection of 0.4773 to 0.8008 from 0.6773 at 1.0008 which overlaps with parity.

However, break of the mentioned trend line support will argue that price actions from 0.7675 was probably in form of a diagonal triangle which was already completed at 0.9541. This will also argue that rally from 0.7015 has also completed with five waves up to 0.9541 too. In other words, 0.9541 should be an important medium term top in such case and deeper decline should then be seen at least to 0.8870 medium term resistance turned support.

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