• EUR/ NZD edged higher on Tuesday as the U.S.-Israeli war on Iran revives concerns about an energy supply shock exacerbating inflation..
• The surge in oil and gas prices recalls Russia’s 2022 invasion of Ukraine, which sparked a global energy crisis and hit Europe especially hard.
• Since Friday, Brent crude has risen nearly 10% and European natural gas prices have surged 50%, with the region heavily reliant on energy imports..
• The ECB’s near-term outlook remains unchanged, but traders now expect no rate cuts by year-end, versus a 40% chance of a cut last week..
• The ECB expects inflation to fall below its 2% target this year and next, giving it some flexibility. However, it estimates that a lasting 14% rise in energy prices would.
• Immediate resistance is located at 1.9761(38.2%fib), any close above will push the pair towards 1.9826(Higher BB).
• Immediate support is seen at 1.9569(Lower BB) and break below could take the pair towards 1.9518(Lower BB).
Recommendation: Good to sell around 1.9730 with stop loss of 1.9780 and target price of 1.9650
