Psychology for major markets Aug 12

EUR/USD – EUR/USD drifting lower towards 1.16 ahead of Tuesday's US CPI which will be a crucial release for the Fed.

USD/JPY – USD/JPY continuing to extend recovery after dip post-US employment data. Potential for further declines if US equities weaken further.

EUR/GBP – GBP supported by close BoE decision with EUR/GBP drifting lower into the low 0.86s helped by labour market data showing still strong earnings growth.

AUD/USD – Found support above key 0.64 area and holding in mid range near 0.65, but downside risks increasing with RBA cuts looking more likely and equities looking more fragile.

Equities – S&P recovered from the post-employment lows, but downside risks persist as evidence of US slowdown emerges, with impact of tariffs still to come.