Psychology for major markets June 14th
EUR under pressure on French election concern; risk sentiment weakening
EUR/USD – Sentiment turning significantly 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. More negative equity tone also suggests JPY upside favoured.
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 with political uncertainty growing in Europe after EU elections.
Equities – New high seen in the S as yields dipped after CPI but valuations getting stretched and European political uncertainty undermining sentiment.