• EUR/AUD initially gained on Tuesday after weak Chinese trade data, but gave up ground as caution prevailed ahead of U.S. inflation figures later this week.
•All eyes will be on U.S. consumer price index data due on Thursday. U.S. inflation likely accelerated slightly in July to an annual 3.3%.
• In an up-and-down session, the pair hit high at 1.6865 in early trading then retreated towards 1.6733.
• Technical signals show the pair could gain more ground in the short-term as RSI is at 60 bullish, daily momentum studies 5, 9 and 11 DMAs are trending up.
• Immediate resistance is located at 1.6844(23.6%fib), any close above will push the pair towards 1.6887 (Higher BB).
• Strong support is seen at 1.6741(5DMA) and break below could take the pair towards 1.6685 (38.2%fib )
Recommendation: Good to buy around 1.6740 with stop loss of 1.6630 and target price of 1.6870
