AUD/USD edged higher to 0.7187 last week but fell sharply from there. Nonetheless, downside is contained above 0.6943 support so far. Initial bias remains neutral this week first, and further rally is in favor at a later stage. However, firm break of 0.6943 will confirm initial rejection by 0.7206 fibonacci level, and turn bias back to the downside for deeper pullback.
In the bigger picture, current development argues that rise from 0.5913 (2024 low) is reversing whole down trend from 0.8006 (2021 high). Decisive break of 61.8% retracement of 0.8006 to 0.5913 at 0.7206 will pave the way back to 0.8006. This will remain the favored case as long as 0.6706 resistance turned support holds, even in case of deep pullback.
In the long term picture, rise from 0.5913 is seen as the third leg of the whole pattern from 0.5506 (2020 low). It’s still early to judge if this is an impulsive or corrective pattern. But in either case, further rise should be seen back to 0.8006 and possibly above.
