AUD/USD’s fall from 0.7748 last accelerated to as low as 0.7366 last week. Bearish outlook is unchanged and further fall is expected to 0.7144/7158 support zone. However, there is no clear sign of larger down trend resumption yet. Hence we’ll be cautious on strong support from0.7144/58 to contain downside and bring rebound.
Initial bias in AUD/USD is neutral this week for consolidation above 0.7366 temporary low. Upside of recovery should be limited below 0.7555 resistance and bring fall resumption. Break of 0.7366 will turn bias back to the downside for 0.7144/7158 support zone. We’ll be cautious on bottoming there. On the upside, break of 0.7555 resistance will argue that fall from 0.7748 has completed and will turn bias back to the upside.
In the bigger picture, we’re still treating price actions from 0.6826 low as a correction pattern. 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 0.8115) 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.