AUD/USD dropped sharply to 0.6849 last week before forming a temporary low and recovered. Current development suggests that corrective rebound from 0.6670 has completed with three waves up to 0.7031. Further decline is mildly in favor as long as 0.6930 minor resistance holds. Break of 0.6849 will target 0.6754 support to confirm this bearish case. However, break of 0.6930 will turn focus back to 0.7031 resistance instead.
In the bigger picture, with 0.7082 resistance intact, there is no clear confirmation of trend reversal yet. That is, down trend from 0.8135 (2018 high) is still expect to continue to 0.6008 (2008 low). However, decisive break of 0.7082 will confirm medium term bottoming and bring stronger rally back to 55 month EMA (now at 0.7487).
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. Next downside target is 61.8% projection of 1.1079 to 0.6826 from 0.8135 at 0.5507.
