• EUR/AUD initially gained on Friday but gave up some ground as investors feared about the prospects for a global recession while they also prepared for U.S. rate hike from the Fed.
• Focus is squarely on next week’s Fed meeting, with futures indicating a 75bp hike fully priced in with chances of a 100bp move a touch lower at 20%, down from near 30% after Tuesday’s CPI data.
• Technical signals are bullish as RSI is at 62, daily momentum studies 5, 9 and 10 DMAs are trending north.
• Immediate resistance is located at 1.4957(23.6% fib), any close above will push the pair towards 1.5024(Higher BB)
• Strong support is seen at 1.4851 (38.2%fib) and break below could take the pair towards 1.4816 (5DMA).
Recommendation: Good to buy around 1.4950, with stop loss of 1.4870 and target price of 1.5050.
