AUD/USD's decline from 0.9327 continued last week and reached as low as 0.8832 so far. Initial bias remains on the downside this week as long as 0.8961 minor resistance holds and further fall should be seen to retest 0.8734 support. Break there will indicate that whole decline from 0.9404 has resumed and should target medium term fibonacci level at 23.6% retracement of 0.6008 to 0.9404 at 0.8603. On the upside, though, above 0.8961 will argue that a short term bottom is formed and will flip intraday bias back to the upside for stronger rebound.
In the bigger picture, the failure below 0.9404 high and deep pull back from 0.9327 mixes up the outlook of AUD/USD and we'll stay neutral for the moment. Nevertheless, one thing to note is that AUD/USD is losing upside momentum as seen with bearish divergence in daily MACD. Hence, even in case of another rise, we'd expect strong resistance as AUD/USD approaches 2008 high of 0.9849 and bring reversal. On the downside, break of 0.8734 support will in turn revive the case that whole medium term rise from 0.6008 has completed and will turn outlook bearish for deeper correction towards 0.7702/0.8626 support zone.
In the longer term picture, as noted before, long term correction from 0.9849 has likely completed at 0.6008 already, after being supported slightly above 76.4% retracement of 0.4773 (01 low) to 0.9849 (08 high). Rise from 0.6008 is possibly developing into a new up trend which extend the long term rise from 0.4773. We'll continue to favor the long term bullish case as long as 0.7702 support holds and expect an eventual break of 0.9849 high. However, a break of 0.7702 support will firstly argue that whole rise from 0.6008 has completed. Secondly this will open up the case that AUD/USD is in phase of a long term consolidation and will gyrate in the large range of 0.6008/0.9849 for some time.
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