AUD/USD’s correction from 0.8006 extended lower to 0.7562 last week but recovered since then. Initial bias stays neutral this week first. On the downside, break of 0.7562 will extend the decline to 100% projection of 0.8006 to 0.7620 from 0.7848 at 0.7462. We’ll look for strong support from there to bring rebound. On the upside, break of 0.7848 resistance is needed to confirm completion of the correction. Otherwise, risk will stay on the downside in case of recovery.
In the bigger picture, whole down trend from 1.1079 (2001 high) should have completed at 0.5506 (2020 low) already. Rise from 0.5506 could either be the start of a long term up trend, or a corrective rise. Reactions to 0.8135 key resistance will reveal which case it is. But in any case, medium term rally is expected to continue as long as 0.7413 resistance turned support holds.
In the longer term picture, 0.5506 is a long term bottom, on bullish convergence condition in monthly MACD. Focus is now back on 0.8135 structural resistance. Decisive break there will raise the chance that rise from 0.5506 is an impulsive up trend. Next target should be 61.8% retracement at 0.8950 and above. Though, rejection by 0.8135 will keep the case of medium to long term sideway consolidation open.
