• EUR/AUD eased on Tuesday as weaker-than-expected Eurozone inflation data reinforced expectations that the European Central Bank (ECB) may continue easing monetary policy.
• Consumer prices in the bloc slowed to 1.9% in May, dipping below the ECB’s 2% target for the first time in months.
• The softer inflation print, especially driven by declining energy costs and a sharp drop in services inflation, strengthened the case for additional rate cuts from the ECB.
• The ECB has cut interest rates seven times since last June and another move on Thursday is almost fully priced.
• Immediate resistance is located at 1.7715(50% fib), any close above will push the pair towards 1.7779(Higher BB).
• Immediate support is seen at 1.7417(61.8% fib) and break below could take the pair towards 1.7279(Lower BB).
Recommendation: Good to buy around 1.7570, with stop loss of 1.7500 and target price of 1.7650.
