Psychology for major markets May 7
Al Arabiya is reporting that intense communications to gradually reopen the Strait of Hormuz are ongoing
EUR/USD – The Euro has rebounded from support circa 1.17. Combined with broad USD weakness on improving sentiment, the pair is trying to gain traction for rally. However ,we are yet to see a break on Wednesday's high as market participants are careful of reading too much into Trump's upbeat remarks.
USD/JPY – The latest round of intervention from MoF has put a lid on USD/JPY. There hasn't been significant rebound in the pair as per previous intervention as it coincides with broader risk mood improvement that weakens the USD.
AUD/USD – Strong support from broader risk sentiment and solid precious metal. AUD/USD bounced from 0.7190 technical area and looks set to test the next resistance at 0.7331.
Equities & Others – Broader risk atmosphere improves but still lack fundamental clarity, only Trump's usual upbeat comment. Al Arabiya is reporting that intense communications to gradually reopen the Strait of Hormuz are ongoing. Market participants are already front running the positive result and could see a "sell the fact" if the agreement is not strong.