• EUR/AUD edged higher on Tuesday but gains were capped as investors weighed ongoing geopolitical tensions and an important U.S. inflation report.
• The Consumer Price Index rose 0.3% last month, lifting annual inflation to 2.7%, while core CPI increased 0.2% in December, taking the year-on-year rate to 2.6%..
• Geopolitical risks remain elevated after the U.S. detained Venezuelan leader Nicolas Maduro, as protests continue in Iran and Trump reiterates interest in the U.S. acquiring Greenland.
• Australia’s economic calendar is light this week, with focus on Westpac Consumer Confidence on Tuesday and Consumer Inflation Expectations on Thursday.
• Technical signals are bearish as RSI is at 39, momentum studies 11,14 and 21 DMAs are trending down.
• Strong resistance is located at 1.7458(38.2% fib), any close above will push the pair towards 1.7530 (SMA 20)
• Immediate support is seen at 1.7305 (23.6% fib) and break below could take the pair towards 1.7214 (Lower BB).
Recommendation: Good to sell around 1.7430, with stop loss of 1.7480 and target price of 1.7330
