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FxWirePro: EUR/ AUD dips below 1.6400 level, focus on near term support

•  EUR/ AUD dipped below 1.6400 level  on Friday  as investors digested Euro zone inflation data and awaited fresh catalyst.

• Euro zone inflation ticked up in July, adding to an already strong case for another European Central Bank interest rate hike, especially as high oil ​prices foreshadow a further broadening of price pressures.

• Eurozone inflation rose to 2.9% in July from 2.8% in June, matching forecasts, as higher oil prices driven by the Iran conflict lifted consumer prices.

• The ECB has strongly signalled a September 10 rate hike, saying the economy is evolving in line with its baseline scenario..

• Financial markets are pricing in more than two rate hikes, with increases fully priced by October and April.

• Immediate resistance is located at 1.6478(50% fib), any close above will push the pair towards 1.6551(SMA 20).

• Immediate support is seen at 1.6327(38.2% fib) and break below could take the pair towards 1.6202(Lower BB).

Recommendation: Good to sell  round 1.6410, with stop loss of 1.6500 and target price of 1.6330

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