FxWirePro: EUR/ NZD extends drop, faces 38.2% fib support

• EUR/ NZD dipped  on Monday as the escalating conflict in the Middle East    rekindled inflation fears. 

• A measure of euro area long-term inflation expectations   jumped as high as 2.1217% from 2.0806% on Friday. It was last at 2.1067%.

• A renewed rise in inflation could pressure the European Central Bank to adjust rates, with money markets now pricing just an 8% chance of a cut by year-end, down from 40% on Friday..

• Investors will monitor  Tuesday’s euro zone inflation data after German figures showed inflation in the bloc’s largest economy unexpectedly eased to 2% in February on lower energy costs..

• In January, euro zone inflation fell to 1.7% after hovering around the 2% target for much of 2025.

• Immediate resistance is located at 1.9681 (SMA20), any close above will push the pair towards 1.9850(50%fib).

• Immediate support is seen at 1.9598(38.2%fib) and break below could take the pair towards 1.9557(Lower BB).

 Recommendation: Good to sell around 1.9680 with stop loss of 1.9750 and target price of 1.9600