Bears takes over EUR/AUD; spinning top on peak of channel

Final Euro zone services PMIs for May was a major focus for the morning and composite PMI in the Euro Area decreased to 53.6 index points in May of 2015 from 53.9 index points in April of 2015. The current figures are printed better than forecast at 53.4.

Meanwhile, the ECB's policy meeting is unlikely to gesture any change in policy direction also with respect to any early tapering of the QE programme.

The ECB's latest updates on staff projections will be of particular interest in the context of yesterday's improving Euro zone inflation data for May.

Technical Insights & Currency Trade Ideas: (EUR/AUD)

The pair was under control of bears to form a "spinning top candlestick" pattern on daily chart of EUR/AUD. The pair is actually puzzling on aggressive bears during the course of yesterday's whole session as there strong tug war between both bulls and bears.|

Even though bulls took over the rallies after day open but ultimately swings could not sustain as the bears brought back the day close at 1.4346.

RSI (14) shows negative divergence at levels.

Slow stochastic evidences %D line crossover above 80 levels suggests overbought sentiments.

When the short term trend was in the mood to prolong upswings, spinning top candle right exactly at the peak of channel line advises that the bulls are losing their interest in the upward momentum.

With a view of trend reversal on the cards, we recommend building fresh positions as given below.

EUR/AUD vs. EUR/USD ─ Long 2M EUR/AUD puts vs. short 2M EUR/USD put with identical EUR Vega value.