• EUR/AUD strengthened on Monday as risk sentiment improved on hopes China's policy stimulus might stabilise the economy
• China stepped up measures to boost the country's faltering economy, with Beijing planning further action including relaxing home-purchase restrictions.
• A daily close above 5DMA will further improve the technical outlook, and open the possibility of a rally towards 1.6780 level.
• Technicals highlight upside risks. The 14- and 21-day moving averages lend support, daily RSI is bullish at 57.
• Immediate resistance is located at 1.6737 ( 5DMA), any close above will push the pair towards 1.6779 (38.2%fib)
• Support is seen at 1.6644 (38.2% fib ) and break below could take the pair towards 1.6580(Lower BB).
Recommendation: Good to buy around 1.6700, with stop loss of 1.6540 and target price of 1.6800
