AUD/USD dropped sharply to as low as 0.8715 last week before forming a temporary low there. The strong break of medium term channel support indicates that AUD/USD has topped out already. Hence, even though some more sideway trading might be seen initially this week, upside is expected to be limited below 61.8% retracement of 0.9324 to 0.8715 at 0.9091 and bring fall resumption. Below 0.8801 minor support will flip intraday bias to the downside. Break of 0.8715 will target 0.8577 key support next.
In the bigger picture, the sustained break of medium term rising channel revives that case that medium term rally from 2008 low of 6.008 is finished at 0.9404 already. Deeper decline should now be seen to wards 0.8577 key support first (23.6% retracement of 0.6008 to 0.9404 at 0.8603). Decisive break there will confirm medium term reversal and should target 0.7702/8262 support zone next. On the upside, break of 0.9404 is needed to confirm medium term rally resumption. Otherwise, outlook will now be neutral at best.
In the longer term picture, 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.