EUR/AUD dropped sharply to 1.5651 last week but drew immediate support from 38.2% retracement of 1.5271 to 1.5886 at 1.5651 and rebounded. The development suggests that rise from 1.5271 is not completed yet. Initial bias is neutral this week first for some more consolidative sideway trading. On the upside, break of 1.5888 will resume the rise from 1.5271 and target 1.6139/89 resistance zone.

In the bigger picture, current development suggests that fall from 1.6189 is a corrective move and has completed at 1.5271 already. Key support levels of 1.5153 and 38.2% retracement of 1.3624 to 1.6189 at 1.5209 were defended. And medium term rise from 1.3624 (2017 low) is still in progress. Break of 1.6189 will target 1.6587 key resistance (2015 high).

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In the longer term picture, the rise from 1.1602 long term bottom (2012 low) 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 1.3624 key support should indicate long term reversal and target 1.1602 long term bottom again.

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