EUR/AUD surged to as high as 1.5703 last week as rebound from 1.5153 extended. Based on strong upside momentum, the cross might be resuming medium term rise from 1.3264. Initial bias stays on the upside this week for 1.5770 resistance first. Decisive break there will confirm this bullish case and target 1.6587 key long term resistance. On the downside, below 1.5622 minor support will dampen this bullish case and turn intraday bias neutral first.
In the bigger picture, medium term rise from 1.3624 is not completed yet. Break of 1.5770 will extend the rise to retest 1.6587 (2015 high). However, considering bearish divergence condition in daily MACD, sustained break of 1.4949 cluster support (38.2% retracement of 1.3624 to 1.5770 at 1.4950) will indicate medium term reversal. And there is prospect of retesting 1.3624 low in that bearish case.
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 1.3671 should indicate long term reversal and target 1.1602 long term bottom again.
