AUD/USD Weekly Outlook

AUD/USD's recovery was limited at 0.6619 last week and turned sideway since then. Initial outlook will be neutral this week. On the upside, above 0.6619 minor resistance will suggests that rebounded from 0.6075 is still in progress and another rise to above 0.7014 could be seen before completing consolidation from 0.6008. On the downside, below 0.6334 will flip intraday bias back to the downside for retesting 0.6008 low and decisive break there will confirm recent down trend has resumed.

In the bigger picture, whole fall from 0.9849 has possibly completed the five wave sequence already, with the fifth wave ended at 0.6008. However, note that the impulsive nature of the fall from 0.9849 to 0.6008 indicate that price actions from 0.6008 is developing into correction/consolidation only. The long term down trend is still expected to resume after completing the consolidation. Sustained break of 0.6008 will indicate that the down trend from 0.9849 has resumed for at least another five wave medium term decline, targeting 0.4773 (01 low). But, note that as long long as 0.6008 low holds, consolidation from could still extend further. Above 0.7014 will target 38.2% retracement of 0.9849 to 0.6008 at 0.7475 before completing the consolidation.

In the longer term picture, a long term top is in place at 0.9849 with bearish divergence condition in monthly MACD and RSI. Considering the corrective three wave structure of the multi year up trend from 0.4773 to 0.9849 and the impulsive nature of the fall from 0.9849, the long term down trend could be resuming. Having said that, while some interim medium term consolidation could be seen, the fall from 0.9849 is in favor to extend to retest 0.4773 low at least.

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