AUD/USD dropped sharply to as low as 0.9663 last week before forming a temporary low there and turned sideway. The deeper than expected fall suggests that rebound from 0.9387 is finished at 1.0752 already. More importantly, it's indicating that whole correction pattern from 1.1079 is not completed yet and fall from 1.0752 would represent the third leg inside such consolidation pattern. Near term outlook will remain bearish as long as 1..0052 resistance holds and below 0.9663 will target 0.9387 and below. Above 1.0052 will indicate short term bottoming and will turn focus back to 1.0752 resistance instead.

In the bigger picture, current development suggests that the decline 1.1079 medium term top is going to extend further, with prospect of diving to 100% projection of 1.1079 to 0.9387 from 1.0752 at 0.9060. Nonetheless, the three wave structure of the fall from 1.1079 to 0.9387 was inline with the view the the whole pattern from 1.1079 would eventually unfold as corrective in nature. That is, the long term outlook in AUD/USD remains bullish. Having said that, we'd expect strong support inside 0.8066, 0.9404 zone, in particular around 50% retracement of 0.6008 to 1.1079 at 0.8544 to contain downside to finish the con

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 still 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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