Psychology for major markets June 17th
EUR under pressure on French election concern; risk sentiment weakening
EUR/USD – Sentiment remains EUR negative as France/Germany spreads widen following the French election announcement. Hard to see a EUR recovery this side of the French election.
USD/JPY – Sharp gains after the lack of BoJ action were quickly reversed on cross selling as the EUR came under pressure due to political uncertainty in France. But USD/JPY continues to push on intervention levels near 158.
EUR/GBP – Negative sentiment persists as EUR suffers from French election uncertainty.
AUD/USD – Undermined by weaker global equity tone triggered by French election uncertainty, but still likely to find support below 0.66.
EUR/CHF – Heavy CHF short positions suggest further downside risk especially given political uncertainty in France.
Equities – New high seen in the US as yields dipped after CPI but valuations getting stretched and European political uncertainty undermining sentiment.