EUR/AUD Weekly Outlook

Despite climbing to 1.2835, EUD/AUD reversed from there and dropped sharply to close the week at 1.2647. Break of the near term trend line is first sign of reversal. Initial bias is mildly on the downside this week for 1.2571 support first. Break there will revive the case that whole rebound from 1.2132 is indeed completed at 1.2900 already. In such case, deeper fall should be seen to 1.2261 and below next. On the upside, though, above 1.2835 will flip bias back to the upside for 1.2900 and above to extend the rebound from 1.2132.
In the bigger picture, while rebound from 1.2132 might extend further and could break 1.2927 support turned resistance, there is no change in the view that such choppy rebound is a correction in the larger down trend from 2.1127 (2008 high). We're now looking at strong resistance from around 55 weeks EMA (now at 1.3095) to limit upside. The downside from 2.1127 is still expected to resume sooner or later to 1.2 psychological level and below.
In the longer term picture, there is no sign of trend reversal yet. We'll stay bearish as long as 1.4261 resistance holds and expect another fall to push the cross through 1.2 psychological level eventually.