EUR/AUD’s fall from 1.6598 resumed last week and hit as low as 1.5963. With no clear sign of bottoming yet, initial bias stays on the downside this week. Decisive break of 1.5996 key support will carry larger bearish implications. Next near term target will be 100% projection of 1.6598 to 1.6161 from 1.6359 at 1.5922, and then 161.8% projection at 1.5652. For now, outlook will stay bearish as long as 1.6161 support turned resistance holds, in case of recovery.
In the bigger picture, immediate focus is now on 1.5996 key support level. Sustained break there will argue that whole up trend from 1.4281 (2022 low) is already reversing. Deeper decline would be seen to 61.8% retracement of 1.4281 to 1.7180 at 1.5388, even as a correction. Nevertheless, strong rebound from current level, followed by break of 1.6359 resistance, will keep medium term outlook neutral at worst.
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 1.6022) 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.
