Psychology for major markets Jan 20

EUR/USD – Continuing to gain as the USD suffers general losses due to the Greenland situation, which is undermining the USD’s safe haven status. Well supported below 1.16, but 1.18 still looks likely to be strong resistance.

USD/JPY – Slipped a little lower on the back of suggestions of possible joint US and Japan intervention, but boosted by snap election call and possible fiscal expansion. But weaker equities on Greenland providing some JPY support.

EUR/GBP – EUR/GBP failed to extend decline below 0.8650 after stronger than expected November GDP data, and is breaking above 0.87 helped by declining risk sentiment, but limited upside for now as labour market data neutral.

AUD/USD – AUD remains well supported by yield spreads and has been resilient to equity declines on Greenland but is vulnerable to a more severe equity sell-off.

Equities – S&P 500 made a new all time highs on January 13 but has slipped lower on the Trump threat of tariffs over the Greenland issue and looks vulnerable given high valuation.