FxWirePro: EUR/AUD gives back chunk of early gains, eyes another drop

• EUR/AUD initially rose following the German conservatives' election win but retraced as attention shifted to the pace of coalition government formation.

• Friedrich Merz is poised to become Germany's next chancellor after his party's victory in Sunday's election, but coalition talks may be challenging with both far-right and far-left parties gaining ground.

• Investors are looking for indications on whether Germany will ease its constitutionally enshrined 'debt brake' rule, which limits the budget deficit to 0.35% of GDP.

• Data released Monday showed that business morale in Germany unexpectedly stalled in February, with the Ifo institute's business climate index remaining flat at 85.2, after a slight upward revision to the January reading.

• Immediate resistance is located at 1.6632(Feb 13th high), any close above will push the pair towards 1.6577 (61.8%fib)

• Support is seen at 1.6410 (50% fib ) and break below could take the pair towards 1.6295(38.2% fib).

  Recommendation: Good to sell around 1.6480 with stop loss of 1.6550 and target price of 1.6400