EUR/AUD dived to as low as 1.4421 last week but recovered strongly since then. The development argues that corrective pull back from 1.5226 has completed with three waves down to 1.4421, after hitting 50% retracement of 1.3624 to 1.5226 at 1.4225. Initial bias remains on the upside this week for 1.5073 resistance first. Break there will indicate resumption of whole rise from 1.3624 through 1.5226. On the downside, below 1.4585 minor support will turn focus back to 1.4421 instead.
In the bigger picture, we’re holding on to the view that corrective decline from 1.6587 medium term has completed at 1.3624. Rise from 1.3624 is expected to resume to retest 1.6587. The corrective structure of the fall from 1.5226 is affirming this view. Above 1.5226 will target a test on 1.6587 key resistance. However, another decline will dampen our view and would drag EUR/AUD lower to retest key support zone around 1.3624.
In the longer term picture, the rise from 1.1602 long term bottom 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 1.3671 should confirm trend reversal and target 1.1602 long term bottom again.
