The AUD/USD pair continued its decline last week, falling from 0.6491. This week, the initial bias remains on the downside, with a target of 0.6421, which is the 61.8% projection of the move from 0.6941 to 0.6511 from 0.6687. A decisive break below 0.6421 could lead to a further decline towards the 100% projection level at 0.6257. However, if the pair manages to break above the 0.6511 level, which now serves as a resistance, the intraday bias could turn neutral, leading to a period of consolidation. Nevertheless, the overall outlook remains bearish as long as the resistance at 0.6687 remains intact, especially in the event of a recovery.
Looking at the bigger picture, the rise from the 2023 low of 0.6269 likely completed with three upward waves reaching 0.6941. The corrective pattern from the 2022 low of 0.6169 seems to be unfolding with another downward movement, indicating the potential for a deeper decline back towards 0.6269 as the sideways trading continues.
In the long term, the downtrend from the 2011 high of 1.1079 probably ended at the 2020 low of 0.5506. The current price action from 0.5506 could be part of a corrective pattern or a trend reversal, but either way, the fall 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 of the pattern has already begun, targeting a move towards 0.8006.
Overall, the AUD/USD pair is likely to face continued downward pressure in the near term, with a potential target at 0.6257. However, a breakout above the 0.6511 resistance level could lead to a period of consolidation. In the long term, a break above the 0.7156 resistance level would indicate a potential trend reversal towards 0.8006. Traders and investors should closely monitor these key levels to assess the future direction of the pair.
