EUR/AUD’s pullback from 1.6617 extended lower last week but stayed well above 1.6306 support. Initial bias remains neutral this week first. On the upside, above 1.6506 minor resistance will bring retest of 1.6617. Firm break there will resume the rebound from 1.6108. However, decisive break 1.6306 support will argue that the rebound has completed, and bring retest of 1.6108.
In the bigger picture, outlook will stay bearish as long as 1.6842 resistance holds. Fall from 1.8554 (2025 high) is expected to continue to 61.8% retracement of 1.4281 to 1.8554 at 1.5913. Decisive break there will pave the way back to 1.4281 (2022 low). However, firm break of 1.6842 should confirm medium term bottoming, and bring stronger rally.
In the longer term picture, 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). Sustained trading below 55 M EMA (now at 1.6577) will confirm this bearish case, and pave the way back towards 1.4281.
