EUR/AUD’s strong rally last week argues that the near term trend might be reversing. Initial bias stays on the upside this week for 1.6598 resistance first. Decisive break there will confirm that whole fall from 1.7180 has complete with three waves down to 1.5963, and target a test on 1.7180 next. On the downside, break of 1.6397 minor support will turn intraday bias neutral again first.
In the bigger picture, EUR/AUD is still holding on to 1.5996 key support despite brief breach. Larger up trend from 1.4281 (2022 low) is still in favor to resume through 1.7180 at a later stage. Nevertheless, sustained break of 1.5995 will indicate that such up trend has completed. Deeper decline would be seen to 61.8% retracement of 1.4281 to 1.7180 at 1.5388, even as a correction.
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 1.6047) 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.
