The AUD/USD pair fell to 0.6977 last week but has since recovered. Initial bias remains neutral this week first. Risks will remain on the downside as long as 0.7076 support turns into resistance. Below 0.6977 the decline will resume from 0.7277 towards support 0.6832. However, a strong break of 0.7076 would indicate that the decline from 0.7277 may have been completed, shifting the bias back to the upside for a stronger recovery.
In the bigger picture, considering the bearish divergence condition in D MACD, a medium term top could be formed at 0.7277 after failing to sustain retracement levels above 61.8% from 0.8006 (2021 high) to 0.5913 (2024 high) at 0.7206. A deeper decline to the 38.2% retracement from 5913 to 0.7277 can be seen at 0.6756 as a correction. But strong support should be seen there for recovery. Consolidation will continue below 0.7277 for a while.
In the long-term picture, the rise from 0.5913 is the third leg of the entire pattern from 0.5506 (2020 low). It is still too early to judge whether this is an impulsive or corrective pattern. But either way, we should see further rise back to 0.8006 and possibly higher. This will remain the preferred case as long as the 55 EMA (now at 0.6782) remains intact.
