• EUR/AUD rebounded strongly on Wednesday as the pair attracted buyers ahead of the ECB's policy announcement.
• Investors do not expect the European Central Bank to raise interest rates when it meets this week, but are still prepared for borrowing costs to remain high.
• A daily close above 38.2%fib will further improve the technical outlook, and open the possibility of a rally towards 1.7200 level.
• From a technical viewpoint, RSI is strongly bullish at 56, daily momentum studies, 5, 10 and 11 daily MAs are pointing higher.
• Immediate resistance is located at 1.6735 (38.2%fib), any close above will push the pair towards 1.6856(23.6%fib).
• Immediate support is seen at 1.6633(50%fib) and break below could take the pair towards 1.6603(21DMA).
Recommendation: Good to buy on dips around 1.6720, with stop loss of 1.6600 and target price of 1.6800
