EUR/USD gains appear limited – Westpac

In view of FX Strategists at Westpac, further gains in EUR/USD seem to be limited around the 1.1120/25 band.

Key Quotes

“Further gains in activity surveys (notably PMI’s), solid Q3 GDP and base effects lifting CPI suggest that support hold until focus turns towards Italian and Austrian elections in early December and the subsequent ECB meeting”.

“However, poor credit demand and deflationary pressures remain and suggest that EUR has limited upside potential”.

“A near term base appears to have formed at 1.0850 but rebounds should be seen in the context of the broad 105-1.16 range of the past year. The 1.1065-1.1125 area is likely to cap any further gains as EUR/USD defines the lower bounds of the broader range”.