Psychology for major markets Jan 30
Risk Smashed
EUR/USD – The Euro took a beating on risk aversion that drove USD bids. There hasn't been much from the Euro side and most flows are driven by broader risk sentiment.
USD/JPY – The consolidation continues and it is likely there will not be major positioning in the pair unless we see further risk meltdown. Snap election results will keep market participants at bay to avoid getting wrong footed.
EUR/GBP – Moderately improved tone of recent UK data had EUR/GBP near the lower end of its recent range. Now looking for a fresh trigger with the pair little changed.
AUD/USD – The fall in gold has taken the legs out of the Aussie. The move coincides with a fail break out of previous resistance and could see a further downward momentum.
Equities – Risk asset took a beating on potential appointment of Kevin Warsh as next Fed chair. market participants are viewing that pick to be hawkish and see USD soaring, though we doubt the story is on shaky grounds becasue there is no way the Trump would appoint someone who does not hold a same view as he does.