AUD/USD's fall from 0.9326 extended further to as low as 0.8942 last week before recovering. While such recovery was strong, it was limited well below 0.9326 high and AUD/USD weakened sharply again towards the end to close near to the weekly low. The development suggests that fall from 0.9326 is still in progress and initial bias will remain on the downside this week. Break of 0.8942 will confirm this bearish case and target 100% projection of 0.9326 to 0.8942 from 0.9180 at 0.8796 next. On the upside, break of 0.9180 resistance is needed to indicate that fall from 0.9326 has completed. Otherwise, outlook will remain bearish.
In the bigger picture, considering bearish divergence conditions in daily MACD, medium term rise from 0.6284 has completed topped out at 0.9326 already. Focus now turns to channel support (now at 0.8886). Sustained break there will confirm this case. In such case, deeper pull back should be seen to 0.8154 cluster support (38.2% retracement of 0.6284 to 0.9326 at 0.8164). Nevertheless, downside should be contained above 0.7702 support and bring rebound. On the upside, above 0.9326 will indicate this view and indicate that medium term rally is still in progress for 0.9849 high.
In the longer term picture, as noted before, 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 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.