• EUR/AUD extended gains on Tuesday as risk-sensitive currencies like Aussie dollar weakened as investors were cautious due to growing conflict in the Middle East.
• There was a muted reaction to mixed China data. China's Q1 GDP growth comfortably topped forecasts while March retail sales, output data suggest momentum remained soft.
• EUR/AUD bulls confidence is running high, a test of the 1.6663 (23.6%fib) highly seems likely.
• From a technical viewpoint, RSI is strongly bullish at 56, daily momentum studies, 5, 10 and 21 daily SMAs all climb.
• Immediate resistance is located at 1.6616(Daily high), any close above will push the pair towards 1.6663 (23.6%fib).
• Immediate support is seen at 1.6560 (38.2% fib) and break below could take the pair towards 1.6500 (EMA 5).
Recommendation: Good to buy on dips around 1.6560, with stop loss of 1.6450 and target price of 1.6650
