• EUR/AUD initially gained on Wednesday but reversed course as soft Chinese data weighed on the pair.
•Data out of China showed that factory and retail output and sales growth hit one-year lows in August, as fresh COVID-19 outbreaks and supply disruptions pointed to a possible economic slowdown.
•After two days gain, pair has retreated to 1.6110 EUR/AUD may need a break above 23.6% fib to clear assault on 1.5700.
• Technical signals are bullish as RSI is at 54, daily momentum studies 5, 9 and 10 DMAs are trending up.
• Immediate resistance is located at 1.6176(38.2%fib), any close above will push the pair towards 1.6278 (23.6 % fib)
• Strong support is seen at 1.6089 (50%fib) and break below could take the pair towards 1.6049 (9DMA).
Recommendation: Good to buy around 1.6110, with stop loss of 1.6050 and target price of 1.6180
