EUR/AUD breached 1.5094 resistance last week but failed to sustain above. Initial bias is neutral this week first. As long as 1.4934 minor support holds, further rise is still expected in the cross. Firm break of 1.5094 resistance will extend the rally from 1.3624 to next medium term fibonacci level at 1.5455. However, considering bearish divergence condition in 4 hour MACD, break of 1.4934 support will confirm short term topping and bring deeper pull back, possibly to 55 day EMA (now at 1.4504).
In the bigger picture, price actions from 1.6587 medium term top are viewed as a corrective pattern. Such correction should be completed at 1.3624 after defending 1.3671 key support. Rise from 1.3642 is now expected to target 61.8% retracement of 1.6587 to 1.3624 at 1.5455 and above. In any case, outlook will now stay cautiously bullish as long as 1.4309 resistance turned support holds.
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.
