• EUR/AUD rose higher on Tuesday as investors hunted for bargains in the wake of an unexpected policy pivot from the Bank of Japan.
• The Bank of Japan kept broad policy settings unchanged, but widened the allowable band for long-term yields to 50 basis points either side of that, from 25 basis points previously.
• The pair is currently approaching resistance at 23.6%fib. Break above is likely push the pair towards 1.6100 level.
• Technical signals are turning bullish as RSI is turning higher at 67, daily momentum studies 5, 9 and 10 DMAs are trending up.
• Immediate resistance is located at 1.5986( 23.6%fib), any close above will push the pair towards 1.6020 ( HIigher BB).
• Strong support is seen at 1.5809(5 DMA ) and break below could take the pair towards 1.5798 (38.2% fib).
Recommendation: Good to buy around 1.5970, with stop loss of 1.5700 and target price of 1.6100 .
