AUD/USD dived to as low s 0.9926 last week but drew support from 38.2% retracement of 0.8066 to 1.1079 at 0.9928 and recovered. A short term bottom is in place and some more consolidations would be seen. But upside of the consolidations should be limited by 1.0526 resistance and finally bring another decline to extend the correction from 1.1079. Below break of 0.9926 will target channel support (now at 0.9670). Though, sustained break of 1.0526 will turn focus back to 1.1079 high instead.

In the bigger picture, rise from 0.8066 has completed with bearish divergence in daily MACD at 1.1079. However, AUD/USD is staying well inside long term rising channel from 2008 low of 0.6008. Hence, there is no indication of trend reversal yet and the current fall from 1.1079 is viewed as a correction only. Hence while deeper decline would be seen to long term channel support and possibly below, we'd expect strong support from 0.9404 resistance turned support to contained downside.

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 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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