EUR/USD Downside Appears Limited – Westpac

EUR/USD Downside Appears Limited – Westpac

4 May 2016, 08:41
Roberto Jacobs

EUR/USD Downside Appears Limited – Westpac

Strategists at Westpac see the pair could struggle to drop further in the near term.

Key Quotes

“Sharp reversal off a critical resistance zone hints that a high may be in place for now”.

“Fed messaging in coming sessions likely to emphasise June is live and global/financial risks have dissipated, a backdrop that EUR is unlikely to sustain gains against”.

EUR could pull back to 1.14 coming days. But, given that the Fed is unlikely to ultimately delver a June hike - not enough time to evaluate whether Q1 weakness is entrenched and too close to the UK referendum vote - EUR should eventually right itself”.

“Improving EUR data trends - 0.6% Q1 GDP, upward revisions to the final April PMI to 51.7 and the sharp rise in the ZEW expectations survey - should also limit EUR downside”.


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