EUR/AUD was bounded in tight range between 1.4945/5101 last week and outlook is unchanged. Initial bias stays neutral this week first. Fall from 1.5241 is seen as the third leg of the consolidation pattern from 1.5226. Another decline is in favor as long as 1.5101 minor resistance holds. Break of 1.4945 will target 1.4791 support and possibly further to 1.4421. On the upside, though above 1.5101 will turn focus back to 1.5241 resistance instead.
In the bigger picture, we’re holding on to the view that corrective decline from 1.6587 medium term top has completed at 1.3624. Rise from 1.3624 is expected to extend to retest 1.6587. The corrective structure of the price actions from 1.5226 is affirming this view. Sustained trading above 1.5226 will target a test on 1.6587 key resistance. However, break of 1.4421 support 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.
