Recent eurozone headlines gave for investors a reason to take a breather, as immediate downside risks have been averted for EUR/USD. Despite repeated attempts, the market failed to close below its 200-day average last week and a near-term bout of short covering is taking hold on several EUR crosses. This is lifting cable through areas where stop-losses likely have been building. Profit taking is also being seen for the recent downtrends in energy and the NOK, presenting pullback risk for USD/NOK. Overall, we view the moves as corrective, especially for EUR/SEK, as price remains beneath a large topping pattern completed earlier this year.
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Barclays