Evidence for a short term risk respite continues to mount… outside the eurozone that is. A reversal day in the Shanghai Composite implies further near-term upside potential and this is reflected in the commodity currencies where momentum is calling for a corrective bounce. Spanish problems, though, continue to be a drag making euro cross trades a focus at the moment; EUR/CAD below 1.2775 would target 1.2450.
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Barclays Capital