We are coming off the end of the 1st quarter and the movements/flows that entails and following it up with a very illiquid few days as most of Europe is about to go on a 4-day weekend for Good Friday and Easter. Throw into the mix a major data event like US employment figures with the continuous overhang of Greece and we have quite the potential powder keg. With respect to EUR/USD we are of the view that as long as the exchange rate sits above the 61.8% and 78.6% retracements of the March range around 1.0685-1.0585 the door remains ajar to a further correction higher – potentially north of 1.1040. Traction under 1.0585 wouldn’t put the downtrend completely into the “free and clear”, but it would be a pretty clear negative development that further sets the stage for a broader downside resumption.
