AUD/USD’s extended decline last week should confirm medium term topping at 0.7187. Initial bias remains on the downside this week for 38.2% retracement of 0.5913 to 0.7187 at 0.6700. On the upside, above 0.6956 minor resistance will turn intraday bias neutral first. But risk will stay on the downside as long as 0.7187 resistance holds, in case of recovery.
In the bigger picture, as long as 0.6706 cluster support holds, rise from 0.5913 (2024 low) should still be in progress. Decisive break of 61.8% retracement of 0.8006 to 0.5913 at 0.7206 will solidify the case that it’s already reversing the down trend from 0.8006 (2021 high). However, firm break of 0.6706 will dampen this bullish case, and bring deeper fall back to 0.6420 support, and possibly below.
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. This will remain the favored case as long as 55 W EMA (now at 0.6669) holds.
