AUD/USD has continued to move lower overall, with price action so far unfolding in a clear three-wave structure from the recent highs into the 0.6989 support area. This suggests the decline may still be part of a corrective phase rather than a fully completed bearish impulse.
On the latest rebound, the market stalled around the 0.7079 region, which now acts as a key short-term resistance zone. From here, there is still a risk of renewed weakness developing, with price potentially extending lower toward the 0.6950 area. This zone could be important for stabilization, either marking the completion of wave C or potentially the end of a broader corrective structure such as a leading diagonal.
From a broader perspective, the structure suggests that if additional downside unfolds this week, the correction from the May 7 high could evolve into a more time-consuming and complex formation than initially expected. This would imply prolonged sideways-to-lower price action rather than a quick reversal.
However, the bearish scenario would be invalidated in the short term if AUD/USD manages to produce a strong impulsive recovery back above resistance and pushes toward the 0.7200 region. Such a move would signal a shift in momentum and would favor a more bullish outlook for the pair.
Overall, the market is currently at a decision point, with 0.6950 on the downside and 0.7200 on the upside acting as key directional thresholds.
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