Owing to a hot night I woke early (just before 5am) and went outside to get some cool air. While there I looked at stars and noticed what appeared to be a satellite travelling from SSW to NNE, passing through a band of high level cloud to the north and reappearing on the other side of it, lower towards the horizon. (There were patches of mid and high level cloud - less than 1/10 cover.) A few minutes after that, I noticed a flashing red light to the WSW, moving ESE. My initial thought was that it was a high altitude jet, but: (a) the lights were flashing irregularly, and a couple of times increased to be around one-quarter the size of a full moon; (b) the object appeared to slow down or pause for several minutes (judged against the background stars), and then resume speed; (c) the object changed direction (towards SE motion); and (d) I don't know any flight paths in that direction (we are ~20km from Melbourne's airport, so are accustomed to low level air traffic). After a few minutes the light was no longer visible, in approximately South direction, or slightly West of South.