The Euro is struggling to go higher today
It took the Euro a couple of days but in the end it managed to stage somewhat of a rally. It was by no means very big, but nevertheless it performed quite well today. The US dollar couldn't hold on to early gains after the data about manufacturing in the Euro Zone disappointed.
We favor buying puts at current level for tomorrows daily expiry on the 25th. After the dip down towards 1.3761 was staged it almost seemed as if a test below 1.3750 is imminent, however as the US session unfolded the stage was clear for a substantial move higher that resulted in a short squeeze as market participants headed for the exits.
After a high marked at 1.3876 the Euro managed to consolidate the session at slightly lower levels in the vicinity of 1.3830-40. Currently the key support would be the blue line on our chart standing at 1.3810. In case there is no traction to provide further action during this session we would be closely looking at tomorrow morning events.
The main reason for the initial drop was disappointing performance of the manufacturing sector in the month of March which was reported by Markit. After we see the IFO sentiment number for Germany tomorrow a clearer picture should appear on the line.
Don't bet too big on a decline, because of the key support holds we could test levels above today's highs at 1.3876. Namely we are envisaging our resistance line which was drawn between previous tops and bottoms and currently stands at 1.3880. If we see a break above some traction could be gained towards the figure at 1.3900.
To summaries our opinion on this binary options forex pair its worth mentioning both directions - if we see an hourly break below 1.3810 we would be buying puts, if we see an hourly break above 1.3880 we would bet the day to finish above that level, bringing us nice gains.