AUD/USD edged higher to 0.7156 last week, but subsequent steep pull back indicates short term topping. Initial bias is now on the downside this week for 55 day EMA (now at 0.6806) and possibly below. But downside should be contained by 38.2% retracement of 0.6169 to 0.7156 at 0.6779 to bring rebound. On the upside, above 0.6994 minor resistance will turn bias neutral first. But overall, corrective pattern from 0.7156 should extend for a while.
In the bigger picture, corrective decline from 0.8006 (2021 high) should have completed with three waves down to 0.6169 (2022 low). Further rally should be seen to 61.8% retracement of 0.8006 to 0.6169 at 0.7304. Sustained break there will pave the way to retest 0.8006. This will now remain the favored case as long as 0.6721 support holds.
In the long term picture, current development suggests that fall from 0.8006 was merely a correction to the rise from 0.5506 (2020 low). Sustained trading above 55 month EMA (now at 0.7193) will raise the chance of up trend resumption through 0.8006 at a later stage.
