After edging higher to 0.8857 initially last week, AUD/USD reversed and dropped sharply to as low as 0.8567 before recovering. The break of 0.8585 support indicates that a short term top is at least formed at 0.8857 with bearish divergence conditions in 4 hours MACD and RSI. Hence, while some consolidation might be seen initially this week, upside of recovery is expected to be limited well below 0.8857 and bring fall resumption. Below 0.8567 will target 0.8154/8468 support zone first.
In the bigger picture, recent rally in AUD/USD is losing some momentum with mild bearish divergence conditions in 4 hours daily MACD. Hence, even in case of another rise, upside is expected to be limited by 61.8% projection of 0.6284 to 0.8262 from 0.7702 at 0.8924 and bring deep pull back. Sustained trading below medium term rising trend line (now at 0.8573) will indicate that a medium term top is formed and bring pull back to 0.7267/7702 support zone.
Nevertheless, note that the strength of the rise from 0.6008 argues that AUD/USD is developing into another up trend. In other words, long term correction from 0.9849 has possibly completed at 0.6008 already, after being support slightly above 76.4% retracement of 0.4773 (01 low) to 0.9849 (08 high). Hence, the anticipated medium term pull back is expected to be contained by 0.7267/7702 support zone and bring rally resumption to retest 0.9849 high eventually. Break of 0.7267 resistance turned support is needed to indicate that whole rise from 0.6008 has completed. Otherwise, we'll continue to favor the longer term bullish case even in case of deep correction.