• EUR/AUD strengthened on Thursday as continuous decline in iron ore prices exerted downward pressure on Australian dollar.
• Iron ore, the primary commodity traded on the Dalian Commodity Exchange, witnessed a decline of 8.9%.
• The retreat in iron ore is proving a drag on Australian government revenue and will shrink its budget surplus in the current fiscal year.
• From a technical viewpoint, RSI is strongly bullish at 52, daily momentum studies, 5, 10 and 11 DMA’s are trending up.
• Immediate resistance is located at 1.6567(Daily high), any close above will push the pair towards 1.6611(23.6% fib).
• Strong support is seen at 1.6504(38.2% fib) and break below could take the pair towards 1.6411 (50% fib).
Recommendation: Good to buy around 1.6530, with stop loss of 1.6400 and target price of 1.6620
