• EUR/AUD strengthened on Friday as Australian dollar weakened after Reserve Bank of Australia warned upside surprises to inflation in policy outlook.
• Reserve Bank of Australia said its Board discussed holding rates steady at its November policy meeting this week, but judged a hike was needed to ensure a slowdown in inflation.
• The pair hit daily high at 1.6839and was last trading at 1.6797 at (GMT 17:23).
• Technical signals strongly bullish as RSI is at 59, daily momentum studies, 5, 10 and 11 daily MAs are pointing higher.
• Immediate resistance is located at 1.6839(23.6%fib), any close above will push the pair towards 1.68961(Higher BB).
• Immediate support is seen at 1.6734(38.2%fib) and break below could take the pair towards 1.6653(50%fib).
Recommendation: Good to buy on dips around 1.6780, with stop loss of 1.6700 and target price of 1.6850
