EUR/USD Downside Appears Limited – Westpac
Strategists at Westpac see the pair could struggle to drop further in the near term.
“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”.