The euro posted a nice bullish breakout from the recent consolidation pattern, which took nearly five months to break. The key resistance was near 1.6540/60, and the EURAUD cross decisively broke above this level yesterday. We also saw a daily close above this resistance, which reinforced the bullish signal.
The price is now continuing with strong bullish momentum as stop-losses of short positions are fueling the rally. The next targets for bulls could be at 1.69/70 and afterwards at around 1.7330.
As this pattern had been for many months, a bullish signal could lead to a medium-term trading setup, thus holding for a longer-term could be more beneficial than a short-term trade.
Alternatively, if the cross falls back below 1.6560, the bullish break would be a false one, and in that case, a larger decline might occur toward the previous cycle lows near 1.61.
So far, it looks like the bullish momentum will continue.