AUD/USD was sold off sharply last week and remained weak towards the end. The close below medium term trend line support raised the possibility of reversal. But we'd still prefer to see sustained break of 23.6% retracement of 0.8066 to 1.1079 at 1.0368 (which is close to 1.0390) to confirm. In that case, deeper pull back should be seen through parity. On the upside, break of 1.0627 minor resistance is needed to signal short term bottoming. Otherwise, we'll be cautiously bearish in AUD/USD ahead.

In the bigger picture, bearish divergence condition daily MACD suggests that rise from 0.8066 might be finished. And that's possible considering that AUD/USD has just missed a long term projection target at 1.1084. But we'll prefer to see sustained break of 1.0390 and 23.6% retracement of 0.8066 to 1.1079 at 1.0368 to confirm. Meanwhile, the pull back, when happens, could be deep and might target the long term channel (now at 0.9624). But we will treat it as a correction only. And, as long as 0.9404 resistance turned support holds, the whole up trend from 2008 low of 0.6008 should still be in healthy status.

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. While AUD/USD might be reversing in medium term, there is no signal of long term topping yet. We'd stay bullish as long as 0.9404 support holds and extend 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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