EUR/USD traded sideways on Good Friday (blue box) as discussed. (“The break of 1.3850 led to an attempt to close the gap but prices did not manage to move beyond 1.3865. During the American session we saw solid selling kicking in, pushing the pair lower by 50 pips. Today is a public holiday in many countries around the globe so we do not expect any major move. The most likely scenario is for a sideways day within a narrow range. Key support: 1.38 and key resistance 1.3850 and 1.3865.“)
From a technical perspective the single currency trades in the middle of its recent range (1.3800:65) with a slight tendency to the upside. A break of the grey trend-line would generate significant rally potential. Last week`s opening gap is still not entirely closed. As long as 1.3800 holds on an hourly basis we would expect the EUR/USD to slowly crawl higher today with subdued volatility (many market participants are still off their desks today due to Easter). If EUR/USD can manage to take out trend-line resistance we could see some follow through buying in the pair towards 1.3880. A fall below 1.3780 would be very negative for the EUR bulls. As long as this level holds we are bullish on the EUR/USD.