AUD/USD dived sharply to as low as 0.9667 last week and the strong break of 0.9926 support confirmed resumption of the whole decline from 1.1079 high. Initial bias remains on the downside this week with 0.9911 minor resistance intact and current fall should target 100% projection of 1.1079 to 0.9926 from 1.0764 at 0.9611 next. On the upside, above 0.9911 minor resistance will turn bias neutral and bring consolidations. But break of 1.0147 support turned resistance is needed to signal short term bottoming. Otherwise, outlook will remain bearish in near term.

In the bigger picture, the strong break of the long term channel from 2008 low of 0.6008 argues that such up trend is finished at 1.1079 with bearish divergence condition in weekly MACD. Nevertheless, we'd prefer to see sustained break of above mentioned 0.9611 projection level first. Such a move will indicate that whole fall from 1.1079 is impulsive in nature and should then take AUD/USD through 0.9404 key support level to 38.2% retracement of 0.6008 to 1.1079 at 0.9142 at least. Nevertheless, strong failure to sustain below 0.96111 will indicate that AUD/USD is merely turning into sideway consolidation pattern between 0.9404 and 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. While AUD/USD might be reversing in medium term, there is no signal of long term topping yet. We'd stay bullish as long as 0.9404 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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