EUR/AUD edged higher to 1.5747 last week but failed to sustain above 1.5704 resistance and retreated. Initial bias remains neutral this week first. But further rally is expected as long as 1.5271 support holds. On the upside, firm break of 1.5747 will resume larger rally from 1.4281. Next target is 61.8% projection of 1.4281 to 1.5704 from 1.5271 at 1.6150.
In the bigger picture, as long as 1.5271 support holds, rise from 1.4281 medium term bottom is expected to continue to 1.6434 key resistance next. However, firm break of 1.5271 will argue that such rebound has completed, and keep medium term outlook neutral at best. But in this case, more range trading should be seen above 1.4281 low first.
In the longer term picture, focus is on 55 month EMA (now at 1.5591). Sustained trading above there will raise the chance of bullish trend reversal, and at least bring further rally to 1.6434 cluster resistance, 38.2% retracement of 1.9799 (2020 high) to 1.4281 at 1.6389. However, rejection by the EMA will revive the chance of down trend resumption through 1.4281 at a later stage.
