EUR/AUD's extended rebound and breach of 1.6264 suggest a medium term bottoming at 1.5774. The initial bias this week stays on the upside toward 1.6334 resistance. A rejection by the 55 W EMA would bring a retest of the low.
EUR/AUD breached 1.6264 after an extended rebound, which suggests a medium term bottoming at 1.5774. Initial bias stays on the upside this week for 1.6334 resistance. A break there would solidify the bullish case and target 1.6842 cluster resistance next.
For now, risk will be mildly on the upside as long as 1.5987 support holds in case of a retreat.
In the bigger picture, a medium term bottom could be in place at 1.5774 on bullish divergence in the daily MACD. The 55 W EMA is now at 1.6548, and a sustained break there would target 1.6842, where the 38.2% retracement of 1.8554 (2025 high) to 1.5774 sits at 1.6836, even as a corrective bounce.
However, rejection by the 55 W EMA would bring a retest of the 1.5774 low.
In the longer term picture, the fall from 1.8554 is seen as the third leg of the pattern from 1.9799 (2020 high), which is part of the pattern from 2.1127 (2008 high). A deeper fall should be seen to 1.4281 and possibly below. This remains the favored case as long as the 55 M EMA, now at 1.6523, holds.
Source: ActionForex
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