AUD/USD dropped further to as low as 1.0017 last week and there is no sign of bottoming yet. Initial bias remains on the downside this week and current fall should target 100% projection of 1.0852 to 1.0225 from 1.0473 at 0.9846 next. On the upside, break of 1.0225 support turned resistance is needed to signal short term bottoming. Otherwise, outlook will remains bearish even in case of recovery.

In the bigger picture, price actions from 1.1079 high are treated as a consolidation pattern in the larger up trend. Third leg has started at 1.0852 and deeper decline would now be seen to 0.9387/9663 support zone. Though, strong support is expected from there to contain downside and bring rebound. Meanwhile, above 1.0473 will dampen this bearish view and bring another rise to extend the rebound from 0.9387 to 1.0852/1079 zone.

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 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.