• EUR/AUD strengthened on Wednesday as softer than expected Australian inflation data weighed on Australian dollar.
• Below-forecast CPI is blow for hawks advocating RBA rate rise next week.
• EUR/AUD bulls are likely to mount a credible run towards 1.6850 level.
• From a technical viewpoint, RSI is strongly bullish at 71, daily momentum studies, 5, 10 and 11 daily MAs are pointing higher.
• Immediate resistance is located at 1.6793(23.6%fib), any close above will push the pair towards 1.6820 (19th Oct 2020 High).
• Immediate support is seen at 1.6560 (38.2%fib) and break below could take the pair towards 1.6500 (5DMA).
Recommendation: Good to buy on dips around 1.6680, with stop loss of 1.6580 and target price of 1.6830
