FxWirePro:EUR/AUD neutral in the near-term, scope for downward resumption

• EUR/AUD traded in tight range on Thursday   as activity remained subdued as broader risk sentiment deteriorated    .

• Wednesday’s hotter-than-expected inflation data, which reinforced expectations that the Reserve Bank of Australia will remain cautious on policy easing.

• RBA Governor Michele Bullock reiterated the need for patience in determining the future path of the official cash rate, signaling that policymakers are not in a rush to adjust settings.

• On the data front, Australia’s fourth-quarter capital expenditure rose 0.4% quarter-on-quarter, slightly above market expectations of 0.0%. However, spending on plant and machinery declined 1.7% q/q, highlighting uneven business investment trends.

•  Technical signals are bearish as RSI is heading down  at 21, daily momentum studies  5, 9 and 11 DMAs are trending down.

•   Immediate resistance is at 1.6867 (SMA 20  ), with a close above potentially pushing the pair to 1.6912 (38.2% fib).

• Support is at 1.6632 (23.6% fib), and a break below could push the pair towards 1.6554(Lower BB).

Recommendation: Good to sell around 1.6600, with stop loss of 1.6680 and target price of 1.6550