• EUR/AUD steadied on Tuesday as declining iron ore and equity prices put downward pressure on the Australian dollar.
• The Australian dollar could face notable effects to a series of macroeconomic data releases from China on Wednesday. Investors are particularly keen on the Q4 GDP figures and December's retail sale.
• A daily close above 23.6% fib resistance will further improve the technical outlook, and open the possibility of a rally towards 1.6600 level.
• From a technical viewpoint, RSI is strongly bullish at 64, daily momentum studies, 5, 10 and 21 daily MAs all climb.
• Immediate resistance is located at 1.6523 (23.6%fib), any close above will push the pair towards 1.6588 (Nov 30th high).
• Immediate support is seen at 1.6427(38.2% fib) and break below could take the pair towards 1.6322 (50% fib).
Recommendation: Good to buy on dips around 1.6500, with stop loss of 1.6400 and target price of 1.6580
