AUD/USD fell to 0.7076 last week but quickly recovered after drawing support from 0.7101. Initial bias stays neutral this week first. On the upside, firm break of 0.7183 resistance will bring stronger rebound to retest 0.7277 high. However, decisive break of 0.7076 will indicate that larger scale correction is underway and target 0.6832 support instead.
In the bigger picture, rise from 0.5913 (2024 low) is still 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). Further rally should then be seen to retest 0.8006. For now, outlook will remain bullish as long as 0.6832 support holds, in case of pullback.
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 0.6790) holds.
