• EUR/AUD initially dipped on Friday but recovered some of the ground as buying demand continued near 1.6315 level.
• French consumer price inflation (CPI) rose 4.1% year-on-year in December, while Spain's annual inflation fell to 3.1% last month.
• A daily close above 38.2%fib will further improve the technical outlook, and open the possibility of a rally towards 1.6450 level.
• Technical signals are bullishas RSI is at 54, daily momentum studies 5,9,21 DMA are trending north.
• Immediate resistance is located at 1.6406(38.2%fib), any close above will push the pair towards 1.6442 (Higer BB).
• Strong support is seen at 1.6315 (50%fib) and break below could take the pair towards 1.6258 (61.8%fib).
Recommendation: Good to buy around 1.6360 with stop loss of 1.8400 and target price of 1.6450
