EUR Trading Outlook (16-05-2014)

The AUD: Bulls remain in the game as the 21-DMA repels another slide but they may be sweating a bit now. Day/week RSIs roll over and the weekly cloud base continues to cap. If the 0.9400/50 resistance can’t be cleared soon longs may exit and a 0.9200 test may be due.

The EUR: The stronger than expected US data pushed the pair down to 1.3650 but bears only managed a 1.3648 low though as market chatter reported large bids in the 1.3645-48 zone. The USD stayed heavy against JPY though and early US yield gains reversed earlier gains. Shorts intensified their covering on the 1.3680 break. A quick move up pierced the daily cloud base & a high of 1.3732 was hit. Offers into the 100-DMA kept stops above 1.3740 safe. The pair pulled back from the high & sat near 1.3715 late in the day. Daily techs suggest the recent slide may be done. A long legged doji forms while RSI diverges on the new low. A break above the 100-DMA & May 12 high (1.3775) likely sees short cover further and signal a s-t bottom. Trader will focus on US housing data tomorrow for next cues.