EUR/AUD bulls banking on a benign Aussie CPI outcome

• EUR/AUD is currently trading on the bid following a daily correction. 
• Aussie CPI outcome will be important for the bulls targeting higher daily highs. 

EUR/USD is trading at 1.6051 and flat on the sessions so far, consolidating the recent bullish rally into daily resistance. 

The price is stuck between a pre-Consumer Price Index event range of 1.6040 and 1.6058. 

The euro was picking up overnight on the back of continued weakness in the US dollar and this enabled the cross to move higher from the corrective lows at the end of last week's business just below 1.5900.

Meanwhile, the event of the day will be Aussie Consumer Price Index for the second quarter. 

''We think +0.8% QoQ, +3.9%y/y (mkt: +0.7%, +3.7%) for headline CPI, and +0.5% QoQ, +1.6% YoY for trimmed mean (mkt: +0.5%, +1.6%),'' analysts at ANZ Bank said. 

Such an outcome should reinforce the Reserve Bank of Australia’s view that “while a pick-up in inflation and wages growth is expected, it is likely to be only gradual and modest.”

Therefore, assuming the RBA maintains its low profile on the question of QE and lockdowns, there would be expected to be further downside in the Aussie for the foreseeable future as central bank divergences play out. 

This could be reflected in today's response to the CPI data and elevate the cross to fresh daily highs in due course. 

With that being said, the markets are unlikely to get too carried away into month-end as well as the Fed and US Gross Domestic Product on Thursday. 

EUR/AUD technical analysis

Bulls are in control and seek a higher daily high in a continuation of the bullish trend.