• EUR/AUD strengthened on Monday as Australian dollar weakened after data showed the Chinese economy is grew more slowly than anticipated.
• China reported growth of 0.8% in the second quarter, above the 0.5% forecast, while the annual pace slowed more than expected to 6.3%, well below expectations.
• EUR/AUD approaching resistance at 23.6%fib . A break above would unmask 1.6550 level in the short term.
• From a technical viewpoint, RSI is strongly bullish at 58, daily momentum studies, 5, 10 and 21 daily MAs all climb.
• Immediate resistance is located at 1.6536 (23.6%fib), any close above will push the pair towards 1.6575 (Higher BB).
• Immediate support is seen at 1.6404 (5DMA) and break below could take the pair towards 1.6360 (38.2%fib).
Recommendation: Good to buy on dips around 1.6460, with stop loss of 1.6340 and target price of 1.6560.
