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FxWirePro:EUR/AUD rises to 1 -1/2 month high, good to buy on dips

• EUR/AUD strengthened on Friday as investors looked past a severe economic contraction in the euro zone.

• Euro zone economy recorded its deepest contraction on record in the second quarter while the bloc’s inflation unexpectedly ticked up in July.

• EUR/AUD bulls confidence is running high, a test of 1.6627 (38.2% fib) highly seems likely.

• From a technical viewpoint, RSI  is strongly bullish at 60, daily momentum studies, 5, 10 and 11 daily  MAs all climb.

• Immediate resistance is located at 1.6582 (200 DMA), any close above will push the pair towards 1.6627 (38.2% fib).

• Immediate support is seen at 1.6417 (23.6% fib) and break below could take the pair towards 1.6362 (9 DMA).

Recommendation: Good to buy on dips around 1.6500, with stop loss of 1.6330 and target price of 1.6600.

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