AUD/USD edged lower to 0.6893 last week but quickly recovered. Initial bias stays neutral this week first. Further fall is expected as long as 0.7012 resistance holds. Below 0.6893 will target 6864, and then 100% projection of 0.7277 to 0.6864 from 0.7237 at 0.6824. However, break of 0.7012 resistance will indicate short term bottoming, and turn bias back to the upside for stronger rebound.
In the bigger picture, price action from 0.7277 medium term top is seen as developing into a corrective pattern to rise from 0.5913. While deeper pullback cannot be ruled out, downside should be contained by 38.2% retracement of 0.5913 to 0.7277 at 0.6756 to bring rebound. Consolidations would continue below 0.7277 for a while, before an eventual upside breakout. However, sustained break of 0.6756 will raise the chance of larger bearish reversal.
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 M EMA (now at 0.6814) holds.
