EUR/AUD’s fall from 1.6765 resumed last week by taking out 1.5774 support and reached 1.5721. As a temporary low was formed, initial bias is neutral this week first, for some consolidations. Near term outlook will stay mildly bearish as long as 1.6038 resistance holds. Break of 1.5721 will target 1.5346 key support. But break of 1.6038 will indicate completion of the fall and turn bias back to the upside.
In the bigger picture, the failure to sustain above 1.6587 key resistance (2015 high) argues that up trend from 1.1602 (2012 low) is not ready to resume yet. But still, as long as 1.5346 support holds, outlook will remain bullish. Break of 1.6765 will target 61.8% retracement of 2.1127 (2008 high) to 1.1602 at 1.7488 next. However, firm break of 1.5346 key support will indicate trend reversal, with bearish divergence condition in weekly MACD, and turn outlook bearish.
In the longer term picture, the rise from 1.1602 long term bottom (2012 low) is still in progress for 61.8% retracement of 2.1127 to 1.1602 at 1.7488. Firm break there will pave the way to 100% projection of 1.1602 to 1.6587 from 1.3624 at 1.8069. This will remain the favored case as long as 1.5346 remains intact.
