"Market concerns that ECB may be closer to tapering QE than anticipated have been supporting the single currency on the crosses. Although the central bank's press agency denied such an idea, we do believe that it will become a bigger topic by the middle of next year.

Nonetheless, it must still be noted that the ECB is unlikely to consider a change to interest rates anytime soon and such prospects are likely to ensure that the EUR does not face sustainable upside for now.

From a broader basis we remain of the view that a gradual uptrend will continue unabated.

In terms of data the focus will be on the final September CPI and the German ZEW economic sentiment survey. While final inflation data is unlikely to provide any surprises the ZEW faces some upside risks given its closer correlation with German stocks.

We keep our long EUR/CAD position".

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