AUD/USD extended its decline from 0.7237 last week, and ActionForex's weekly outlook keeps the initial bias on the downside. The 0.6756 fibonacci level is the key line: a hold could bring a rebound, while a sustained break would raise the chance of a larger bearish reversal.
ActionForex says AUD/USD's decline from 0.7237 continued last week. The outlet's initial bias stays on the downside this week for the 0.6756 fibonacci level.
A firm break of that level would, according to ActionForex, target 0.6723, the 100% projection of 0.7237 to 0.6893 from 0.7067. On the upside, a move above 0.6853 minor resistance would turn intraday bias neutral first.
In the bigger picture, ActionForex sees price action from the 0.7277 medium term top developing into a corrective pattern to rise from 0.5913. A deeper pullback cannot be ruled out, but the analysis expects the 38.2% retracement of 0.5913 to 0.7277 at 0.6756 to contain the downside and bring a rebound.
Consolidations would continue below 0.7277 for a while, before an eventual upside breakout. However, a sustained break of 0.6756 would raise the chance of a larger bearish reversal.
In the long term picture, ActionForex sees the rise from 0.5913 as the third leg of the whole pattern from 0.5506, the 2020 low. It is still early to judge whether that pattern is impulsive or corrective. Either way, further rise should be seen back to 0.8006 and possibly above, and this stays the favored case as long as the 55 M EMA, now at 0.6806, holds.
Source: ActionForex
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