• EUR/AUD rally extended on Thursday after data showed increased inflation in Europe.
• German inflation rose in line with expectations in December due to base effects, while French consumer prices also rose in December, matching expectations.
• A close above 1.6345 (38.2%fib) will likely trigger a new bullish phase with potential for 1.6400.
• From a technical viewpoint, RSI is strongly bullish at 52, daily momentum studies, 5 and 9 daily MAs all climb.
• Immediate resistance is located at 1.6345 (38.2%fib), any close above will push the pair towards 1.6418(23.6%fib).
• Immediate support is seen at 1.6282 (50% fib) and break below could take the pair towards 1.6219 (61.8% fib).
Recommendation: Good to buy on dips around 1.6300, with stop loss of 1.6200 and target price of 1.6380
