EUR Trading Outlook (02-04-2014)

AUD/USD: The longer-term trend remains up but daily techs and flash shows some warning for the pair. Another long wick forms on the daily candle after making a new high and the RSI is diverged at o/b levels. A break below 0.9215/20 would probably see the pair retest 200 DMA (0.9138).

EUR/USD: The initial spike in Europe saw the pair breached the 200 MA and briefly traded above 1.3800 and then spiked down below 1.3783 again but a quick rebound took hold. Asian offers into 1.3820 and other offers ahead of the 21 DMA capped the rally & 1.3790 was revisited after US PMI came in as forecasted. Market sentiment seems to be growing that the ECB won’t act. EUR/USD rally might persist unless the ECB takes action to stem the EUR’s rise.