EUR/AUD edged lower to 1.6122 last week but recovered quickly. Initial bias stays neutral this week first. Further fall is expected as long as 1.6343 resistance holds. Break of 1.6122 will target 1.6033 low first. Decisive break there will resume larger down trend from 1.9799. On the upside, break of 1.6343 resistance will firstly indicate short term bottoming. Also, consolidation pattern fro 1.6033 should have then started another rising leg.
In the bigger picture, price action from 1.9799 are seen as developing into a corrective pattern. The question is whether it’s a sideway pattern or a deep correction. On the downside, sustained break of 1.6033 will suggest it’s the latter case and target 61.8% retracement of 1.1602 (2012 low) to 1.9799 at 1.4733. On the upside, break of 1.6827 resistance will favor the former case and bring stronger rebound.
In the longer term picture rise from 1.1602 (2012 low) could have already completed with three waves up to 1.9799. The development suggests that long term range trading is extending with another medium term down leg. Sustained trading below 55 month EMA (now at 1.5838) will further affirm this case and target 1.1602/3624 support zone.
