• EUR/AUD traded in narrow range on Tuesday as doubts over the prospects of a deal to end the conflict with Iran weighed on pair.
• The latest attacks and comments from U.S. Secretary of State Marco Rubio that a deal with Iran could take “a few days” cooled hopes for a quick resolution, as markets looked for signs of further escalation in tensions.
• Traders were also weighing comments from European Central Bank board member Isabel Schnabel, who said the ECB should raise interest rates in June even if ongoing peace talks with Iran lead to a deal.
• Markets are currently pricing in around a 90% chance of a quarter-point ECB rate hike in June, with at least two more 25-basis-point increases expected by year-end.
• Immediate resistance is located at 1.6313 (38.2%fib), any close above will push the pair towards 1.6348 (higher BB)
• Immediate support is seen at 1.6158 (Lower BB) and break below could take the pair towards 1.6128(23.6%fib).
Recommendation: Good to sell around 1.6240 with stop loss of 1.6300 and target price of 1.6170
