• EUR/NZD initially rose on Tuesday but later reversed course after data showed Eurozone inflation eased below the European Central Bank’s 2% target in May.
• Eurozone consumer inflation eased to 1.9% in May, down from 2.2% in April and below the 2.0% forecast, driven by falling energy prices and a steep drop in services inflation across the 20-country block.
•A more closely watched measure of underlying inflation core inflation, which excludes volatile items like energy and food slowed to 2.3% in May from 2.7% in April, according to Eurostat, the EU’s statistics agency.
• The European Central Bank (ECB) has already lowered interest rates seven times since June last year, reflecting its ongoing efforts to counter subdued inflation and weak economic growth.
•Money markets are now nearly certain that the ECB will deliver another 25-basis-point cut on Thursday, which would bring the region’s benchmark rate down to 2%.
• Immediate resistance is located at 1.9171 (50%fib), any close above will push the pair towards 1.9284(April 30th high).
• Immediate support is seen at 1.8920(61.8%fib) and break below could take the pair towards 1.8842(Lower BB).
Recommendation: Good to buy around 1.8940, with stop loss of 1.8820 and target price of 1.9000
