The market appears to be slowly responding to the Greek bailout deal given the general euro recovery yesterday. EUR/GBP is leading the charge but if EUR/AUD, EUR/CAD and EUR/NZD all follow through by breaking their respective recent range highs today, then we would expect the short covering move to snowball. Bigger picture, the euro downtrend remains in play and ultimately we will be looking to fade the rally but near term we would let the stampede run its course first.
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Barclays Capital