EUR/AUD’s decline accelerated to as low as 1.5652 last week. Downside acceleration raised the chance of medium term reversal. Initial bias remains on the downside this week for 1.5621 key support next. On the upside, break of 1.5774 support turned resistance is needed to be first sign of short term bottoming. Otherwise, deeper will still be in favor in case of recovery.
In the bigger picture, considering bearish divergence condition in daily MACD, even if rise from 1.3624 (2017 low) extends, upside should b limited by 1.6587 key resistance (2015 high) to bring reversal. Meanwhile, sustained break of 1.5621 support should confirm reversal and turn outlook bearish for 1.5153 support and below.
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.
