FxWirePro: EUR/AUD trends higher, but faces potential pitfalls

• The EUR/AUD gained some ground on Friday investors positioned themselves ahead of next week’s European Central Bank rate decision.

• Eurozone inflation rose to 2.2% in November, close to the ECB’s 2% target, while the economy grew about 1.5% over the past two quarters, suggesting no urgent   changes  in policy is required.

• The ECB  is expected to keep interest rates unchanged next week, with eurozone inflation roughly in line with the central bank’s 2% medium-term target.

• On the data front,German inflation rose to 2.6% in November, the federal statistics office said on Friday, confirming preliminary data.

• Inflation, or consumer prices harmonised to compare with other European Union countries, stood at 2.3% year-on-year in October.

•  Immediate resistance is located at 1.7690(50%fib), any close above will push the pair towards 1.7718(SMA 20).

•  Support is seen at 1.7587(38.2%fib) and break below could take the pair towards 1.7462(23.6%fib).

Recommendation: Good to sell around 1.7660 with stop loss of 1.7740 and target price of 1.7590