AUD/USD stayed in consolidation above 0.7003 last week and outlook is unchanged. Initial bias remains neutral this week first. In case of another recovery, upside should be limited by 0.7121 minor resistance to bring fall resumption. On the downside, break of 0.7003 will resume the fall from 0.7295 to 61.8% retracement of 0.6722 to 0.7295 at 0.6941 and below. However, sustained break of 0.7121 resistance will dampen this view and bring stronger rise to 0.7206 and above.
In the bigger picture, as long as 0.7393 resistance holds, we’d treat fall from 0.8135 as resuming long term down trend from 1.1079 (2011 high). Decisive break of 0.6826 (2016 low) will confirm this bearish view and resume the down trend to 0.6008 (2008 low). However, firm break of 0.7393 will argue that fall from 0.8135 has completed. And corrective pattern from 0.6826 has started the third leg, targeting 0.8135 again.
In the longer term picture, prior rejection by 55 month EMA maintained long term bearishness in AUD/USD. That is, down trend from 1.1079 (2011 high) is still in progress. Sustained break of 0.6826 will target 0.6008 low and then 61.8% projection of 1.1079 to 0.6826 from 0.8135 at 0.5507.
