• EUR/AUD initially gained but gave up ground on Tuesday as investors digested Euro zone business activity data.
•Euro zone business activity growth slowed more than expected at the end of 2025, as a deeper manufacturing contraction and softer services expansion weighed on momentum.
• The composite PMI dropped from 52.8 to 51.9 in December, with manufacturing output declining again.
•Manufacturing activity contracted for a second straight month, with the headline PMI falling to 49.2 from 49.6 in November, its lowest since April and below the 49.9 forecast.
•Services activity continued to support growth, but momentum eased, with the PMI slipping to 52.6 from a 2½-year high of 53.6 in November, below the 53.3 forecast..
• Immediate resistance is located at 1.7774(Daily high), any close above will push the pair towards 1.7881(38.2%fib).
• Support is seen at 1.7667(38.2%fib) and break below could take the pair towards 1.7571(Nov 3rd low).
Recommendation: Good to buy around 1.7710 with stop loss of 1.7630 and target price of 1.7780
