In Europe, the theme of EUR short covering continues to intensify along with the rally in the CAC 40. In Japan, the equity and currency relationship is rather the opposite given the recent positioning. Signs of a near-term correction in the Nikkei are in line with profit taking on bearish JPY positions built over the past few months. USD/JPY posted a Key Reversal Day and is likely to unwind its extreme sentiment readings. This is also likely helping a broader USD offer in the short term.
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Barclays Capital