AUD/USD Weekly Outlook

AUD/USD continued to consolidate below 0.9541 last week without making any progress. Further choppy trading could still be seen, with risk of another dip. However, short term outlook should still be mildly bullish as long as 0.9252 cluster support holds (50% retracement of 0.8953 to 0.9541 at 0.9247). Above 0.9472 will argue that such correction has completed and will put focus back to 0.9541 high. However, break of 0.9252 cluster support will indicate that whole rally from 0.8953 has completed and will put short term rising trend line (now at 0.9084) into focus.

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, 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, deeper decline should then be seen at least to 0.8870 medium term resistance turned support.

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