AUD/USD Weekly Outlook

AUD/USD's rebounded extended further to as high as 0.6603 last week, breaking 0.6553 resistance and is now back pressing 55 days EMA (now at 0.6573). The development suggests that fall from 0.6849 has completed and has turned short term outlook bullish for rally to this resistance. While some pull back might be seen, a break of 0.6408 support is needed to revive the bearish case that fall from 0.6849 is still in progress, otherwise, another rise is still in favor.

In the bigger picture, outlook remains rather mixed with AUD/USD still bounded in range of 0.6248 and 0.6849. The main question is still on whether consolidation from 0.6008 has completed at 0.7267 already. On the upside, though, above 0.6849 will suggest that such consolidation is still in progress for another rise to 0.7267 or even further to 38.2% retracement of 0.9849 to 0.6008 at 0.7475 before completion. On the downside, break of 0.6248 low will affirm the bearish case that fall from 0.7267 is resuming medium term down trend. Sustained break of 0.6008 will confirm that down trend from 0.9849 has resumed and will be 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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