The uptick in European equities is keeping near-term pressure on the US dollar and a low close (below 81.00) in the US dollar index would confirm a near-term top. This signals an extension of the two-week up-moves in EUR/USD and GBP/USD. EUR/USD, however, is approaching important resistance which is likely to provide a cap. Profit taking was evident in USD/JPY and JPY crosses, where we would look for better levels to enter JPY shorts.
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Barclays Capital