AUD/USD’s rebound lost momentum after hitting 0.7609 and reversed. The development mixed out the near term outlook. And we’ll wait and see which side AUD/USD will break out to.
Initial bias in AUD/USD is neutral this week first. With 0.7562 minor resistance intact, deeper fall is just mildly in favor for0.7472 support. Firm break there will revive the case that whole rise from 0.7158 is completed at 0.7740. In that case, AUD/USD will target a test on 0.7158 key support level next. On the upside, above 0.7562 minor resistance will turn bias back to the upside for 0.7609 resistance. Break will target a test on 0.7748 high.
In the bigger picture, we’re still treating price actions from 0.6826 low as a correction. And, as long as 38.2% retracement of 0.9504 to 0.6826 at 0.7849 holds, long term down trend from 1.1079 is expected to resume sooner or later. Break of 0.6826 low will target 0.6008 key support level. However, firm break of 0.7849 will indicate that rise from 0.6826 is developing into a medium term rebound, rather than a sideway pattern. In such case, stronger rise should be seen to 55 month EMA (now at 0.8144) and above.
In the longer term picture, while the down trend from 1.1079 might extend lower, we’re not anticipating a break of 0.6008 (2008 low) yet. We’ll look for bottoming above there to reverse the medium term trend.
