EUR/AUD dropped further to 1.5714 last week but failed to sustain below 1.5721 low and recovered. Initial bias is neutral this week first. More sideway trading could be seen. But in case of strong recovery, upside should be limited by 1.6122 resistance to bring fall resumption. On the downside, sustained break of 1.5721 will resume the decline from 1.6765 to 1.5346 key support next.
In the bigger picture, as long as 1.5346 support holds, outlook will still 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.
