EUR/AUD dropped further to 1.5655 last week but quickly recovered. Initial bias is neutral this week first. At this point, we’re slightly favoring the case the rebound from 1.5354 has completed with three waves up to 1.6168. Below 1.5655 will affirm this week and target 1.5354 and then 1.5250 low. However, above 1.5905 will turn bias back to the upside for retesting 1.6168 instead.
In the bigger picture, medium term outlook remains neutral for the moment. Rise from 1.5354 is seen as the third leg of the corrective pattern from 1.5250 low. Further rise cannot be ruled out, but even in that case, strong resistance should be seen at 38.2% retracement of 1.9799 to 1.5250 at 1.6988. Larger down trend from 1.9799 is in favor to extend through 1.5250 at a later stage.
In the longer term picture, fall from 1.9799 (2020 high) is seen as a long term down trend. Further decline will remain in favor as long as 38.2% retracement of 1.9799 to 1.5250 at 1.6988 holds. Break of 1.5250 will target 61.8 retracement of 1.1602 (2012 low) to 1.9799 at 1.4733
