AUD/USD Weekly Outlook

The stronger than expected rebound to 0.6849 last week dampened the immediate bearish case but the then deep retreat to 0.6428 didn't provide any strong evidence for a bullish view neither. Nevertheless, considering that daily MACD is now holding above signal line, a short term bottom should be in place at 0.6248. Another rise is mildly in favor and above 0.6849 will target 0.7267 resistance and above. On the downside, though, below 0.6248 will confirm that fall from 0.7267 has resumed for retesting 0.6008 low.

In the bigger picture, main question now is whether consolidation from 0.6008 has completed at 0.7267 already. At this point, another rise is mildly in favor as long as 0.6248 support holds, towards 0.7267 or even further to 38.2% retracement of 0.9849 to 0.6008 at 0.7475. Nevertheless, upside should be limited there and bring down trend resumption. On resumption, down trend from 0.9849 is expected to development another five wave medium term decline, targeting 0.4773 (01 low).

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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