EUR Trading Outlook (12-05-2014)

AUD/USD: Range trades still in play on the pair of 0.9345-0.9395. Current pivot of 0.9345 is still holding up the AUD, a break from there would test 0.93 level.

EUR/USD: The pair initially was holding just under 1.3850 for Asia and Europe session. Large options expired in the 1.37710-1.3810 zone put the bears back in as support line broke the April low. NY session then cracked the 1.3789 (daily cloud top, TL off July’s low) to test 1.3770. Little bounce was seen and the pair took another hit to 1.3745 low. Technical side shows extremely bearish as the weekly RSI diverged on the new high this week, a bearish engulfing candle forms on the weekly chart while the daily RSI is biased down and the daily cloud top is broken. A break of 21 MA looks likely. ECB members will be speaking this week, if they stand on the same side as Draghi then may further encourage bears to push EUR down further.