• EUR/AUD initially gained but gave up ground as investors digested and awaited ECB meets on Thursday
• Euro zone inflation dipped last month, data showed on Wednesday, entering a soft patch that most economists expect will last for at least a year and keep the European Central Bank on hold.
• Price growth in the 21 countries that share the euro slipped to its lowest level since September 2024, dropping to 1.7% in January, weighed down by a fall in energy prices. The reading was in line with economists' forecasts.
• Trading was muted ahead of the ECB’s rate decision on Thursday, with the central bank widely expected to keep its deposit facility rate unchanged at 2%.
• Technical signals are bearish as RSI is at 21, momentum studies 11,14 and 21 DMAs are trending down.
• Strong resistance is located at 1.6972(38.2% fib), any close above will push the pair towards 1.7131 (50% fib)
• Immediate support is seen at 1.6778 (23.6% fib) and break below could take the pair towards 1.6703 (Lower BB).
Recommendation: Good to sell around 1.6880, with stop loss of 1.6950 and target price of 1.6800
