After edging higher to 0.9404 last week, AUD/USD reversed and fell sharply to as low as 0.9060. As short term top is at least in place with bearish divergence conditions in 4 hours MACD and RSI. Initial bias will remain on the downside this week and deeper decline should be seen to 0.8915 support next. On the upside, above 0.9213 minor resistance will indicate that an intraday low is in place and bring consolidations. But recovery is expected to be limited well below 0.9404 high and bring fall resumption.
In the bigger picture, last week's break of the medium term rising channel support serves as the first indication that a medium term top is in place at 0.9404 already. Focus now turns to 0.8915 support for confirmation. In such case, deeper decline should be seen to 0.7702/8262 support zone to correct the rally from 0.6008. Nevertheless, break of 0.9404 will indicate that the rally is not completed yet and further rise would then be seen towards 0.9849 high before conclusion.
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 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.