EUR/AUD edged lower to 1.5519 last week but recovered since then. Initial bias is neutral this week first. As long as 1.5693 minor resistance intact, further decline is expected. On the downside, break of 1.5519 will resume the decline from 1.6357 for 1.5271/5313 cluster support zone next. On the upside, break of 1.5693 should indicate short term bottoming, on bullish convergence condition in 4 hour MACD. In that case, stronger rebound would be seen back to 55 day EMA (now at 1.5940).
In the bigger picture, current development argues that up trend from 1.3624 (2017 low) is possibly completed at 1.6357, ahead of 1.6587 (2015 high). This is supported by bearish divergence condition in weekly MACD. Deeper decline is now in favor to 1.5271 cluster support (38.2% retracement of 1.3624 to 1.6357 at 1.5313). Break will target 61.8% retracement at 1.4668. On the upside, break of 1.5984 support turned resistance is now needed to revive the prior medium term up trend. Otherwise, further decline will be in favor even in case of strong interim rebound.
In the longer term picture, the rise from 1.1602 long term bottom (2012 low) isn’t over yet. We’ll keep monitoring the development but there is prospect of extending the rise to 61.8% retracement of 2.1127 to 1.1602 at 1.7488 and above. However, sustained trading below 1.3624 key support should indicate long term reversal and target 1.1602 long term bottom again.
