• EUR/AUD saw early gains but retraced as market volatility surged, driven by escalating concerns over the economic consequences of U.S. tariff adjustments.
• This week was among the most turbulent for markets in years, as Trump rolled out and then eased some tariffs, while sharply increasing duties on Chinese goods to 145%.
• The 90-day tariff pause turns attention to potential U.S. trade deals with individual nations. The EU has delayed retaliation, with Trade Commissioner Maros Sefcovic set to meet U.S. officials on Monday.
• Despite global market volatility, euro zone financial markets remain stable, and the ECB is closely monitoring the effects of the U.S. dollar's decline, ECB President Christine Lagarde said.
• All eyes are on next Thursday’s ECB policy meeting, with markets fully pricing in a 25bps rate cut. Investors will watch closely for the ECB’s take on how tariffs are shaping the economic outlook.
• Immediate resistance is located at 1.8126(38.2%fib), any close above will push the pair towards 1.787(23.6%fib).
• Immediate support is seen at 1.7772(50%fib) and break below could take the pair towards 1.416(61.8%fib).
Recommendation: Good to buy around 1.8030, with stop loss of 1.7900 and target price of 1.8450
