More Conviction On FX Than Equities

The re-pricing of risk in the eurozone since late June has seen European markets head substantially higher in recent weeks, with several key equity indices currently up against major technical resistance levels en route to test their 2010 highs. With sovereign debt fears in the euro area having gradually abated since June and strong macroeconomic leading indicators pointing towards favourable sentiment in recent months, European equity markets may begin to look moderately overvalued, as daily relative strength indices (RSIs) enter overbought territory.

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