AUD/USD’s fall from 0.7555 accelerated to as low as 0.7110 last week. The break of 0.7169 support affirms the case that larger fall from 0.8006 is resuming. Initial bias stays on the downside this week first. Break of 0.7105 will target 0.6991 key support next. On the upside, break of 0.7208 minor resistance will delay the bearish case and turn intraday bias neutral first.
In the bigger picture, with 0.6991 cluster support (38.2% retracement of 0.5506 to 0.8006 at 0.7051) intact, we’re seeing price action from 0.8006 as a correction only. That is, up trend from 0.5506 low would resume after the correction completes. However, sustained break of 0.6991 will argue that the whole medium term trend has probably reversed. Deeper fall would be seen to 61.8% retracement at 0.6461.
In the longer term picture, focus remains on 0.8135 structural resistance. Decisive break there will argue that rise from 0.5506 is developing into a long term up trend that reverses whole down trend from 1.1079 (2011 high). In that case, further rally would be seen to 61.8% retracement of 1.1079 to 0.5506 at 0.8950 and possibly above. Rejection by 0.8135 will keep long term outlook neutral at best.
