Psychology for major markets Nov 3
USD still generally firm, JPY finding some support
EUR/USD – Breaking below 1.1540 to its lowest since late July. Little obvious trigger for the move but the USD is seeing some general strength helped by strong US equities and solid survey data in the absence of any official US data.
USD/JPY – USD/JPY holding at key resistance area of 154.40 helped by some verbal intervention from Finance minister Katayama, but not backing off significantly. EUR/JPY falling back from all time highs as USD makes general gains elsewhere, but downside likely quite limited without equity turn or intervention.
EUR/GBP – EUR/GBP reached new highs for the year at 0.8818 on reports of a reduction in OBR productivity projections which will further increase UK fiscal problems, but has dropped back as EUR has softened. Two way risks on BoE meeting this week, with further modest EUR/GBP decline likely on unchanged rate decision.
AUD/USD – AUD gained on expectations of a US/China trade deal and higher than expected Q3 CPI, but AUD/USD has slipped back on general USD strength post-FOMC, and remains in the middle of the 0.64-0.67 range that has held for most of the year.
Equities – S&P 500 holding near new all time highs with US/China trade deal a positive and solid tech earnings., but valuations remain very high.