AUD/USD’s sharp decline last week and downside acceleration is affirming the case of near term reversal. That is rise from 0.7158 is completed at 0.7748 already. Focus will now be on 0.7490 support. Firm break there will confirm this bearish case and target 0.7158 again in near term.
Initial bias in AUD/USD remains on the downside this week for 0.7490 key near term support. Decisive break there will confirm completion of whole rise form 0.7158. In such case, deeper fall would be seen back to 0.7144/58 support zone. On the upside, break of 0.7586 support turned resistance is needed to confirm completion of the fall from 0.7448. Otherwise, outlook will remains cautiously bearish in case of recovery.
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 0.8142) 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.