• EUR/AUD initially gained on Thursday but rally fizzed as soft German business climate raised concerns over German economic outlook.
• The ifo Business Climate Index fell unexpectedly to a five-month low of 87.0 in July from 88.6 in June. The reading was seen at 88.9.
• On the bright side, ECB data showed a moderate rebound in loans to companies, suggesting the credit cycle may be starting to turn due to lower interest rates.
• Immediate resistance is located at 1.6623(23.6%fib), any close above will push the pair towards 1.6674(April high).
• Immediate support is seen at 1.6527(38.2% fib) and break below could take the pair towards 1.6430 (50% fib).
Recommendation: Good to by around 1.6540, with stop loss of 1.6460 and target price of 1.6620
