• EUR/AUD slipped lower on Thursday as Australian dollar bounced back against euro on upbeat risk sentiment.
• Risk sentiment improved after reports indicated that China is contemplating a capital injection of up to 1 trillion yuan into its largest state banks to enhance their ability to support the struggling economy.
• Chinese economic activity and consumer spending are likely to benefit Australia, given its strong trade reliance and economic connections with China.
• From a technical viewpoint, RSI is strongly bearish at 36, daily momentum studies, 11, 14 and 21 daily MAs are lower .
• Immediate resistance is located at 1.6347 (38.2% fib), any close above will push the pair towards 1.6427(Sep 24th high).
• Immediate support is seen at 1.6196 (23.6% fib) and break below could take the pair towards 1.6168 (Lower BB).
Recommendation: Good to sell around 1.6230, with stop loss of 1.6320 and target price of 1.6150.
