FX volumes picked up yesterday following the long weekend in the UK but remain at levels that suggest the summer doldrums will persist this week into the month end. Euro short covering is an important theme and yesterday EUR/USD closed above its daily cloud. However, this is not sufficient to signal the end of the downtrend of the last 12 months. The Skandis present the greatest risks for a further squeeze after the snapback yesterday; EUR/SEK above 8.3470/70 would likely trigger fresh stop loss buying.
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Barclays Capital