• EUR/AUD rally extended towards 1.6700 on Friday as China's struggling economy and Middle East geopolitical tensions further weakened Australian dollar.
• China's consumer prices were flat in September, while factory-gate prices shrank at slower pace, official data showed on Friday.
• A daily close above 23.6%fib resistance will further improve the technical outlook, and open the possibility of a rally towards 1.7800 level.
• From a technical viewpoint, RSI is strongly bullish at 58, daily momentum studies, 5, 10 and 21 DMA’s are trending higher.
• Immediate resistance is located at 1.6730(23.6%fib), any close above will push the pair towards 1.6795 (Sep 13th high).
• Immediate support is seen at 1.6641 (38.2%fb)and break below could take the pair towards 1.6578(5DMA).
Recommendation: Good to buy on dips around 1.6680, with stop loss of 1.6600 and target price of 1.6750
