The Australian dollar to US dollar (AUD/USD) pair continued its decline last week, dropping from 0.6941. The breach of the 0.6621 resistance level indicates a potential bearish reversal in the near term. The initial bias remains on the downside for this week, targeting the 61.8% retracement level of 0.6269 to 0.6941 at 0.6526. However, if the price surpasses the minor resistance level of 0.6694, the intraday bias could shift to neutral, leading to a period of consolidation.
Looking at the broader picture, the upward movement from the 2023 low of 0.6269 seems to have completed with three waves up to 0.6941. The corrective pattern from the 2022 low of 0.6169 is currently unfolding with another downward leg. This could result in a further decline back to 0.6269 as the market continues to trade sideways.
In the long-term perspective, the downtrend from the 2011 high of 1.1079 likely ended at the 2020 low of 0.5506. The current price action from 0.5506 is uncertain, as it could be part of a corrective pattern or a trend reversal. Regardless, the drop from 0.8006 is considered the second leg of the pattern. A strong break above the 0.7156 resistance level would suggest that the third leg has already commenced towards 0.8006.
In conclusion, the AUD/USD pair is facing a potential bearish reversal in the near term, with a downside bias towards the 0.6526 level. However, a break above 0.6694 could shift the intraday bias to neutral. The broader outlook suggests a corrective pattern is unfolding, with the possibility of further declines back to 0.6269. Long-term trend analysis indicates a potential upward movement towards 0.8006 if the price manages to surpass the 0.7156 resistance level. Traders and investors should closely monitor key support and resistance levels to assess the future direction of the AUD/USD pair.
