FxWirePro: EUR/AUD dips below lower range, bearish bias increases

• EUR/AUD dipped on Friday as the Australian dollar drew support from firm commodity prices and strengthening expectations of tighter RBA policy.

• Minutes from the RBA indicated policymakers are preparing for a possible rate increase if inflation remains sticky, with attention now turning to Q4 CPI data due January 28.

• A stronger-than-expected Q4 core CPI reading is seen as a potential trigger for an RBA rate increase in February, with markets closely watching the January 28 inflation data..

• Australia’s central bank holds its first policy meeting of the year on February 3, with market pricing implying a 28% probability of a quarter-point rise in the 3.6% cash rate.

•  Immediate resistance is located at 1.7614(Daily high), any close above will push the pair towards 1.7649(38.2%fib).

•  Support is seen at 1.7563(Lower BB) and break below could take the pair towards 1.7481(23.6%fib).

Recommendation: Good to sell around 1.7540 with stop loss of 1.7600 and target price of 1.7480