FxWirePro: EUR/AUD downside pressure builds, key support level in focus

• EUR/AUD dipped on Tuesday    as dimming hopes for a U.S.-Iran peace deal sent oil prices higher and weighed on risk sentiment.

• Rising oil prices and stronger-than-expected U.S. CPI data point to higher inflation pressures for the UK, putting the Bank of England in a difficult position as it balances weak growth against persistent price risks.".

•  Energy supply risks via the Strait of Hormuz are dragging European assets, as elevated crude prices continue to worry investors.

• On the policy front, European Central Bank policymaker Joachim Nagel said the ECB would need to raise interest rates if an oil shock from the Iran conflict threatened to unanchor eurozone inflation expectations, warning that energy-driven price pressures could become persistent.

• Money markets currently expect three hikes from the ECB before the end of ⁠the year.
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•  Immediate resistance is located at 1.6311(SMA 20), any close above will push the pair towards 1.6494(38.2%fib)

• Support is seen at 1.6151(23.6%fib) and break below could take the pair towards 1.6119(Lower BB).

Recommendation: Good to sell   around 1.6220, with stop loss of 1.6270 and target price of 1.6150