The AUD/USD pair saw a slight decline to 0.6657 last week before recovering. This week, the initial bias remains neutral for some consolidation. However, there is an expectation of further decline as long as the resistance at 0.6758 holds. If the pair drops below 0.6657, the next target would be 0.6621. A clear break below this level would confirm a bearish reversal. On the contrary, a break above 0.6758 would indicate that the pullback from 0.6941 has ended and the bias is back to the upside.
Looking at the bigger picture, the overall price actions from the 2022 low of 0.6169 are considered a medium-term corrective pattern, with the rise from 0.6269 being the third leg. A decisive break of the 100% projection from 0.6269 to 0.6870, starting from 0.6340, at 0.6941 would target the 138.2% projection at 0.7179. However, if the support at 0.6621 is breached, it would suggest that the rise from 0.6269 has ended and could lead to a deeper fall back to the 0.6269/6348 support zone.
In the long-term perspective, the downtrend from the 2011 high of 1.1079 likely ended at the 2020 low of 0.5506. It remains uncertain whether the price actions from 0.5506 are forming a corrective pattern or a trend reversal. Nonetheless, the fall from 0.8006 is viewed as the second leg of the pattern. A strong break of the resistance at 0.7156 would indicate that the third leg has already commenced towards 0.8006.
It is essential for traders and investors to closely monitor the key support and resistance levels mentioned above to gauge the future direction of the AUD/USD pair. Market sentiment, economic data releases, and geopolitical developments can also influence the currency pair’s movements. As always, risk management strategies should be in place to mitigate potential losses and maximize profits in the dynamic forex market.
