EUR Trading Outlook (21-05-2014)

AUD/USD: The bull channel base and daily cloud top have been broken while day/week RSIs are firmly biased down. A clean break of the 55 DMA likely add more pressure and should lead to test of key support near 0.9200. Beyond that traders look for a test of the 200-DMA at 0.9171.

EUR/USD: Tight ranges were in play yesterday, EUR/USD was dragged down by the drop in EUR/JPY and EUR/GBP while USD/JPY traded heavily for most of the day. NY held the 1.3687/1.3706 range. The pair seems to be getting comfortable near recent low of 1.3645 and numerous rally was seen into the daily cloud and towards 100-DMA. If tomorrow’s statement from FOMC stands on the same line as Plosser then EUR/USD is likely to trade heavy and may see May low & 200 DMA (1.3632) tested.