AUD/USD’s rebound from 0.6087 extended higher last week but lost momentum again just ahead of 38.2% retracement of 0.6941 to 0.6087 at 0.6413. Initial bias is turned neutral this week first. On the downside, firm break of 0.6327 will suggest that the corrective rebound has completed, and bring deeper fall to retest this low. Nevertheless, sustained break of 0.6413 will pave the way back to 61.8% retracement at 0.6615, even still as a correction.
In the bigger picture, fall from 0.6941 (2024 high) is seen as part of the down trend from 0.8006 (2021 high). Next medium term target is 61.8% projection of 0.8006 to 0.6169 from 0.6941 at 0.5806. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.6505) holds.
In the long term picture, prior rejection by 55 M EMA (now at 0.6823) is taken as a bearish signal. But for now, fall from 0.8006 is still seen as the second leg of the corrective pattern from 0.5506 long term bottom (2020 low). Hence, in case of deeper fall, strong support should emerge above 0.5506 to contain downside to bring reversal. However, this view is subject to adjustment if current decline accelerates further.
