AUD/USD dropped further to as low as 0.7054 last week but formed a temporary low there and recovery. Initial bias is neutral this week first. But outlook will stay bearish as long as 0.7228 resistance holds. Current development suggests that larger correction from 0.8006 is in its third leg. Below 0.7054 will target a retest on 0.6966 low first.
In the bigger picture, price actions from 0.8006 are seen as a corrective pattern to rise from 0.5506 (2020 low). Fall from 0.7660 should be the third leg of this pattern. Break of 0.6966 will target 50% retracement of 0.5506 to 0.8006 at 0.6756. On the upside, break of 0.7660 will revive that case that the correction has already completed at 0.6966.
In the longer term picture, focus remains on 0.8135 structural resistance. Decisive break there will argue that rise from 0.5506 is developing into a long term up trend that reverses whole down trend from 1.1079 (2011 high). However, rejection by 0.8135 will keep long term outlook neutral at best.
