Psychology for major markets January 28th

EUR/USD – Dropping back towards 1.04 as tech sector concerns fade and tariff threats come to the fore once again. Yield spreads and relative cheapness of European equities still suggest EUR upside bias.

USD/JPY – JPY rose strongly on the US equity market falls on tech sector concerns and lower US yields but has retraced most of the gains. However, yield spreads still suggest a lower USD/JPY.

EUR/GBP – Still biased higher as risk weighted towards BoE easing more than expected and market remains concerned at UK fiscal position.

AUD/USD – Made new post-pandemic lows near 0.61 on general USD strength and risk aversion, but has bounced strongly and looks good long term value near current levels, but may be held back by risk aversion near term.

Equities – Dipping on tech sector concerns as AI profitability looks threatened by Chinese competition. High valuations mean there is scope for a large correction, with tariffs also potentially a concern.