Psychology for major markets 19 Jan

EUR/USD – Strong USD tone fading slightly but hard to see much USD weakness while geopolitical concerns rise.

USD/JPY – USD/JPY coming off new highs for the year and looking stretched. Any weakening in risk sentiment would suggest scope for significant JPY gains on the crosses.

EUR/GBP – EUR/GBP slipping lower after higher CPI for December, but gains halted by weak retail sales data. Underlying sentiment GBP positive as UK inflation is perceived to be more persistent than elsewhere, but yield spreads suggest EUR/GBP risks are higher.

AUD/USD – Rallying after weak employment data on general USD correction, but employment data and weak China sentiment makes upside scope look limited.

USD/CHF – CHF looks toppish here as SNB turns more dovish and halts FX selling. 
 

Equities – US market holding firm but may be vulnerable to any decline in easing expectations.