EUR/AUD dropped to as low as 1.5780 last week but recovered well ahead of 1.5721 low. Initial bias remains neutral this week first as consolidation from 1.5721 might extend. On the downside, decisive break of 1.5271 will resume the fall from 1.6765 and target 1.5346 support next. On the upside, in case of another recovery, upside should be limited by 1.6122 resistance.
In the bigger picture, as long as 1.5346 support holds, outlook will remain bullish. Uptrend from 1.1602 (2012 low) is expected to resume sooner or later. 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.
