EUR/AUD’s dipped further to 1.6002 last week but recovered just ahead of 1.5996 key support level. Initial bias stays neutral this week first. On the upside, firm break of 1.6184 resistance should confirm short term bottoming. Intraday bias will be back on the upside for 1.6256/6629 resistance zone. However, sustained break of 1.5996 will carry larger bearish implications, and target 100% projection of 1.7180 to 1.6256 from 1.6629 at 1.5705.
In the bigger picture, as long as 1.5996 support holds, up trend from 1.4281 (2022 low) is still expected to resume at a later stage. However, decisive break of 1.5996 will argue that the medium term trend has reversed and turn outlook bearish.
In the longer term picture, rise from 1.4281 is seen as the second leg of the pattern from 1.9799 (2020 high), which is part of the pattern from 2.1127 (2008 high). As long as 55 M EMA (now at 1.6008) holds, this second leg could still extend higher. However, sustained trading below 55 M EMA will open up the bearish case for extending the decline through 1.4281 low.
