AUD/USD’s reaches as high as 0.7635 last week as the rebound from 0.7328 extended. Further rally is expected this week as long as 0.7523 support holds. At this point, there is no clear sign of range breakout at. Hence, we’d be cautious on topping again as it approaches medium term fibonacci level at 0.7849. Meanwhile, break of 0.7523 will argue that rebound from 0.7328 is possibly completed. In that case, intraday bias will be turned back to the downside for 0.7370 support.
In the bigger picture, we’re still treating price actions from 0.6826 low as a corrective pattern. And, as long as 38.2% retracement of 0.9504 to 0.6826 at 0.7849 holds, long term down trend from 1.1079 is expected to resume sooner or later. Break of 0.6826 low will target 0.6008 key support level. However, firm break of 0.7849 will indicate that rise from 0.6826 is developing into a medium term rebound, rather than a sideway pattern. In such case, stronger rise should be seen to 55 month EMA (now at 0.8116) and above.
In the longer term picture, while the down trend from 1.1079 might extend lower, we’re not anticipating a break of 0.6008 (2008 low) yet. We’ll look for bottoming above there to reverse the medium term trend.
