• EUR/AUD initially dipped but recovered ground on Wednesday as diverging interest rate expectations between the Eurozone and Australia supported the pair.
• Reserve Bank of Australia signalled a likely pause in rate increases in April after raising interest rates to an 11-year high.
• The dovish tilt by the RBA stood in contrast with European Central Bank which indicated more rate hikes from the ECB in coming months even amid signs of easing price pressures
• The pair currently is approaching resistance at 38.2%. A break above would unmask 1.6100 level in the short term.
• 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 1.6049 (23.6%fib ), any close above will push the pair towards 1.6100(Psychological level).
• Immediate support is seen at 1.5931 (Daily low) and break below could take the pair towards 1.5877 (38.2%fib).
Recommendation: Good to buy on dips around 1.5980, with stop loss of1.5780 and target price of 1.6100.
