• EUR/AUD initially gained but gave up some ground as investors digested cooler than expected Australian CPI data
• Data from the Australian Bureau of Statistics showed its monthly consumer price index (CPI) rose 0.4% in April, from the previous month, while the annual pace slowed to 4.2%, from 4.6%.
• Wednesday’s softer-than-expected CPI reading reinforced the view that inflation pressures are easing, giving the Reserve Bank of Australia more room to stay on hold in the near term.
• Futures pricing now implies a 92% probability that the RBA will keep the cash rate unchanged at its June meeting.
• Attention is also on Australia’s Q1 capital expenditure data due at 01:30 GMT, with Reuters consensus forecasting a 1.0% quarter-on-quarter increase.
• Immediate resistance is located at 1.6346(May 27th high), any close above will push the pair towards 1.6371(38.2%fib)
• Support is seen at 1.6261( SMA 20) and break below could take the pair towards 1.6125(23.8%fib).
Recommendation: Good to sell around 1.6310, with stop loss of 1.6390 and target price of 1.6250
