The bearish breakout in German 10y yields is helping to support the EUR. In particular, both the EUR/AUD and EUR/AUD crosses are staging near-term bounces as profit taking leads them toward the January highs. These moves have also put the brakes on the rally in AUD/USD and NZD/USD, which are at risk of closing below near-term averages for the first time since the end of 2011. Ultimately, we expect the multi-week channels to hold the downtick, keeping the greater trends intact.
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Barclays Capital