The euro is consolidating and we suspect range trading will continue to dominate trading over the rest of the week. Yesterday, EUR/GBP topped out against its range high with a Key Day Reversal implying near-term downside risk. However, while EUR/USD remains above 1.2705 we are reluctant to assume that the rally off the July low is actually over. Japanese equities are poised to move into the global spotlight with the Topix at risk of completing a large triangle that would point to a new 2012 low.
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Barclays Capital