AUD/USD’s rebound and break of 0.7315 resistance last week suggests that pull back from 0.7477 has completed at 0.7169 already. Initial bias is mildly on the upside this week for 0.7477 resistance first. Sustained break there will argue that larger decline from 0.8006 has completed and turn near term outlook bullish. On the downside, below 0.7224 minor support should resume the fall from 0.7477 through 0.7169 to retest 0.7105 low.
In the bigger picture, with 0.6991 cluster support (38.2% retracement of 0.5506 to 0.8006 at 0.7051) intact, we’re seeing price action from 0.8006 as a correction only. That is, up trend from 0.5506 low would resume after the correction completes. In that case, main focus will be 0.8135 key resistance (2018 high). Sustained break there will carry larger bullish implications. However, sustained break of 0.6991 will argue that the whole medium term trend has indeed reversed.
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). In that case, further rally would be seen to 61.8% retracement of 1.1079 to 0.5506 at 0.8950 and possibly above. Rejection by 0.8135 will keep long term outlook neutral at best.
