AUD/USD’s choppy rebound from 0.6776 extended higher last week. But overall outlook is unchanged. Price actions from 0.7064 are seen as a consolidation pattern, with rise from 0.6776 as the second leg. Upside should be limited by 0.7064 resistance to bring one more down leg. On the downside, below 0.6922 minor support will turn bias to the downside for 0.6776 support and below. However, sustained break of 0.7064 will resume whole rise from 0.5506 instead.
In the bigger picture, rebound from 0.5506 medium term bottom could be correcting whole long term down trend from 1.1079 (2011 high). Further rally would be seen to 55 month EMA (now at 0.7311). This will remain the preferred case as long as it stays above 55 week EMA (now at 0.6741). Sustained trading below 55 week EMA will turn focus back to 0.5506 low instead.
In the longer term picture, there is no change in the view that down trend from 1.1079 (2011 high) is still in progress. Such down trend could extend through 0.5506 low after completing the corrective rise from there. However, sustained break of 55 month EMA (now at 0.7311) will raise the chance of long term reversal and turn focus back to 0.8135 key resistance.
