AUD/USD’s rebound from 0.7490 accelerated last week and the development suggests that pull back from 0.7740 is completed. Also, rise from 0.7158 is likely resuming. The focus is now back on key fibonacci resistance level at 0.7849.
Initial bias in AUD/USD remains on the upside this week for 0.7740 first. Break will resume the rally form 0.7158 and would target 61.8% projection of 0.7158 to 0.7740 from 0.7490 at 0.7850 next. That coincides with key long term retracement level at 0.7849. At this point, we’d expect strong resistance from 0.7849/50 to limit upside and bring reversal. On the downside, break of 0.7490 will turn bias back to the downside for 0.7158 support.
In the bigger picture, we’re still treating price actions from 0.6826 low as a correction. 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 seek to 55 month EMA (now at 0.8185) 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.
