• EUR/AUD gained toeards 1.6235 as euro rose amid short-covering as investor focus turned to euro zone October PMI next week.
• Investors will pay attention to the euro zone due on October 24. Estimates call for increases from September's results for the composite, manufacturing and services components.
• Scope is growing for much bigger gains to retest the key 38.2% fibonacci level.
• From a technical viewpoint, RSI is strongly bullish at 65.75, daily momentum studies, 5, 10 and 11 daily MAs are pointing higher.
• Immediate resistance is located at 1.6238 (SMA9), any close above will push the pair towards 1.6267 (38.2%fib).
• Immediate support is seen at 1.6196(50% fib) and break below could take the pair towards 1.6129(61.8%fib).
Recommendation: Good to buy on dips around 1.6230, with stop loss of 1.6120 and target price of 1.6300
