AUD/USD's fall from 1.0612 extended last week and the development suggests that rebound from 0.9588 has finally finished, ahead of the upper trend line resistance as anticipated. Initial bias remains on the downside this week for lower channel support (now at 1.0352). Break there will affirm this bearish view and should target 1.0176 and below. Meanwhile, break of 1.0528 minor resistance is needed to indicate completion of fall from 1.0612. Otherwise, we'll now stay cautiously bearish in AUD/USD in near term.
In the bigger picture, price actions from 1.1079 high are treated as a consolidation pattern in the larger up trend, in form of a triangle. Fall from 1.0612 could be the fifth and final leg in this pattern. Hence, firstly, such decline from 1.0612 is expected to extend further lower ahead to 0.9968 support and below. Secondly, downside is eventually expected to be contained above 0.9588 key support. After that, we might see an upside breakout for a new high above 1.1079.
In the longer term picture, whole up trend from 0.4773 (01 low) extended to a point where it just missed 100% projection of 0.4773 to 0.9849 from 0.6008 at 1.1084. At this point, there is prospect for a lengthier medium term consolidation. But there is no indication of long term reversal yet. We'll stay bullish as long as 0.8066 support holds and expect an eventual break of 1.1084 to 138.2% projection at 1.3023, which is close to 1.3 psychological level, in the long term.
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