• EUR/AUD rebounded strongly on Tuesday as Australian dollar slipped lower after weak Australian economic data.
• Australia recorded a current account deficit of AUD 4.9 billion in Q1, missing the market estimate of a AUD 5.9 billion surplus and following a revised surplus of AUD 2.7 billion in Q4 2023.
• Corporate profits fell by 2.5% quarter-on-quarter in the first quarter, following a revised growth of 7.1% in the fourth quarter. This decline was significantly below the market estimate of -0.9%.
• Technical signals show the pair could gain more ground in the short-term as RSI is pointing up at 52, daily momentum studies 5, and 9 DMAs are trending north.
• Immediate resistance is located at 1.6390(38.2%fib), any close above will push the pair towards 1.6404(Higher BB).
• Immediate support is seen at 1.6339 (50% fib) and break below could take the pair towards 1.6292(61.8%fib).
Recommendation: Good to buy on dips around 1.6350, with stop loss of 1.6200, and target price of 1.6410
