• EUR/AUD gained on Wednesday as markets absorbed a heavy flow of headlines related to the Iran conflict
• Donald Trump said the U.S. and Iran had “productive” talks toward ending hostilities, but Iran denied any contact, keeping markets cautious.
• Despite an improvement in global risk sentiment driven by reports of a U.S. proposal aimed at ending the conflict the pair showed little reaction, reflecting underlying uncertainty about whether de-escalation will materialize.
• Europe remains highly exposed to energy price swings due to its reliance on imports through the Strait of Hormuz, a key route for a fifth of global oil now largely halted by the war.
• Strong resistance is located at 1.6681 (Daily high), any close above will push the pair towards 1.6780 (Higher BB)
• Immediate support is seen at 1.6489 (38.2%fib) and break below could take the pair towards 1.6432(SMA 20).
Recommendation: Good to 4buy around 1.6640 with stop loss of 1.6540 and target price of 1.6700
