The FX market is all about positioning and in my opinion the market is structurally long of AUD (long Australian assets) at extreme levels and most of the big banks tell us that the underlying demand for EUR is very strong (and really only the speculators are selling).
I’m obviously talking my position here, (and it is a fantastic one 🙂 ), but I feel that a break and weekly close above 1.3250 say, will open the way for a major short-covering rally. If EUR/AUD can reach 1.50 then the AUD/USD would need to fall to my target at 92 cents and the EUR/USD would need to be back near 1.3800. I think this is achievable.