• EUR/AUD strengthened on Wednesday as rising COVID-19 cases and persist pandemic lockdowns in Australia weighed on Australian dollar.
• Lockdowns in Australia’s two largest cities, Sydney and Melbourne, which account for the bulk of the country’s economic output and employment, hurt investor sentiment.
• A daily EUR/AUD close above the 38.2% fib will further improve the technical outlook, and open the possibility of a rally towards 1.6100.
• Technical signals are bullish as RSI is trending up at 64, daily momentum studies 5, 9 and 10 DMAs are pointing upwards.
• Immediate resistance is located at 1.6063 ( 38.2%fib), any close above will push the pair towards 1.6146 (23.6%fib).
• Immediate support is seen at 1.6021 (5DMA ) and break below could take the pair towards 1.6000(50%fib).
Recommendation: Good to buy around 1.6040, with stop loss of 1.5990 and target price of 1.6100
