EUR / AUD remained in a narrow range above 1.6538 last week and the outlook is unchanged. The initial bias remains neutral this week first. The focus remains on whether it could defend the key support level of 1.6597. On the upside, the breakout of resistance at 1.7194 should confirm a short-term trough. A stronger rise should then be observed for a 38.2% retracement from 1.9799 to 1.6538 to 1.7784 thereafter. On the downside, however, a breakout of 1.6538 will indicate a resumption of the decline from 1.9799. More importantly, sustained trade below the key support of 1.6597 will lead to greater bearish implication and target support of 1.5962 thereafter.
Overall, the focus remains on key cluster support of 1.6597 (2015 peak and 38.2% retracement of 1.1602 to 1.999 to 1.6668, EMA to 55 weeks (now at A strong rebound from the current level will maintain a medium-term uptrend. From 1.1602 (2012 low) would continue to 1.9799. However, a sustained break out of 1.6597 will suggest a bearish reversal and a target retracement of 61.8% at 1.4733.
In the longer term, the increase from the long-term low of 1.1602 (2012 low) is still underway, with 2.1127 (2008 high) as the next target. However, a sustained break out of the 1.6597 cluster support (2015 high), with a 38.2% retracement from 1.1602 to 1.9799 to 1.6668, will argue that this rally is over. The outlook will then become bearish for a 61.8% retracement to 1.4733.