EUR/AUD edged higher to 1.5887 last week but turned into consolidation since then. Initial bias stays neutral this week first and the consolidation might extend. But downside should be contained by 1.5596 support to bring another rally. On the upside, break of 1.5887 will target 1.5984 support turned resistance first. Break will pave the way to retest 1.6357 high next. However, break of 1.5596 will suggest that the rebound is completed. Intraday bias would then be turned back to the downside for 1.5346 low.
In the bigger picture, no change in the view that 1.6357 is a medium term top. But the strong rebound ahead of 1.5271 cluster support (38.2% retracement of 1.3624 to 1.6357 at 1.5313) suggests price actions from 1.6357 are developing into sideway consolidation, rather than a deep correction. The range of 1.5271/6357 is likely set for the consolidation. And we don’t expect a break of the range any time soon. But decisive break of 1.6357 will resume the larger up trend from 1.3624 (2017 low) to 1.6587 (2015 high).
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.
