AUD/USD Weekly Outlook

AUD/USD's fall was contained at 0.7849 last week, above 0.7826 support and recovered. Such development argues that price actions from 0.8262 are merely consolidation in the larger rise which in turn suggests that AUD/USD has not topped out yet. Initial bias is mildly on the upside this week as long as 0.7972 minor support holds and retest of 0.8236/8262 resistance zone could be seen. Break will bring rally resumption. But after all, upside should diminish as AUD/USD meets 61.8% retracement of 0.9849 to 0.6008 at 0.8382 and bring reversal finally. On the downside, below 0.7972 minor support will flip intraday bias back to the downside and further break of 0.7826 support will revive the case that AUD/USD has topped out already.

In the bigger picture, AUD/USD price actions from 0.6008 are treated as correction to down trend from 0.9849 only and has already met target zone of 0.7802/0.8519. Focus remains on reversal signal as AUD/USD stays in this range. While another rise cannot be ruled out for the moment, strong resistance should be seen as AUD/USD approaches 0.8519 resistance and bring reversal eventually. ON the downside, break of 0.7826 support will now be an important signal that whole correction from 0.6008 has completed and will turn focus to 0.7267 key support for confirmation.

However, note that sustained break of 0.8519 resistance will seriously dampen this view and argue that the sharp decline from 0.9849 to 0.6008 was indeed a correction to long term rally from 0.4773 to 0.9849 only. And in such case, stronger medium rise could then be seen to retest 0.9849 high.

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