AUD/USD’s fall from 0.8135 resumed by taking out 0.7758 and reached as low as 0.7712. As a temporary low was formed, initial bias is neutral this week first. Near term outlook remains bearish as long as 0.7892 resistance holds. Below 0.7712 will target 100% projection of 0.8135 to 0.7758 from 0.7988 at 0.7611.
In the bigger picture, medium term rebound from 0.6826 is seen as a corrective move. It might still extend higher but we’d expect strong resistance from 38.2% retracement of 1.1079 to 0.6826 at 0.8451 to limit upside to bring long term down trend resumption. On the downside, break of 0.7500 support will now be an important signal that such corrective rebound is completed.
In the longer term picture, 0.6826 is seen as a long term bottom. Rise from there could either reverse the down trend from 1.1079, or just develop into a corrective pattern. At this point, we’re favoring the latter. And, as long as 38.2% retracement of 1.1079 to 0.6826 at 0.8451 holds, we’d anticipate another decline through 0.6826 at a later stage. But strong support should be seen between 0.4773 (2001 low) and 0.6008 (2008 low).
