EUR Trading Outlook (06-05-2014)

AUD/USD: Mention of persistent AUD strength may get attention again as AUD/USD is basically unchanged from the April 1 meeting. Should rhetoric over AUD and recent data ramp up AUD/USD may trade heavy. Traders may then see 0.9200 break and the H&S top on daily charts complete. A break of 0.9200 immediately targets the 200-DMA. A break and close below that would open door for 0.8990/00 and then the March low near 0.8890.

EUR/USD:
The pair held in a tight range of 1.3865-87 as market await a slew of EZ services PMIs tomorrow, Yellen’s testimony and ECB on Thursday. A strong PMI may see market make a run for stops above 1.3890-1.3910. However, upside should be limited below 1.3965-70 before ECB. Tech favours bulls also as long lower wicks on recent daily candles show dips are bought while the 10, 21 & 55 DMA are bullishly aligned.