EUR/AUD’s rally from 1.5963 continued last week and the break of 1.6598 resistance confirmed that correction from 1.7180 has already completed, after defending 1.5995 key support. But as a temporary top was formed at 1.6712, initial bias stays neutral for consolidations first. On the upside, break of 1.6712 will resume the rally from 1.5693 to retest 1.7180 high next.
In the bigger picture, EUR/AUD is holding on to 1.5996 key support despite brief breach. Larger up trend from 1.4281 (2022 low) is still in favor to resume through 1.7180 at a later stage. Nevertheless, sustained break of 1.5995 will indicate that such up trend has completed and deeper decline would be seen.
In the longer term picture, rise from 1.4281 is seen as the second leg of the pattern from 1.9799 (2020 high), which is part of the pattern from 2.1127 (2008 high). As long as 55 M EMA (now at 1.6052) holds, this second leg could still extend higher. However, sustained trading below 55 M EMA will open up the bearish case for extending the decline through 1.4281 low.
